(Updates prices)
* Dollar rebounds from a 2-week low
* China coronavirus death toll rises
* Gold specs cut bullish positions in week to Jan. 28 - CFTC
By K. Sathya Narayanan
Feb 3 (Reuters) - Gold fell 1% on Monday, retreating from
its highest level in nearly four weeks as China's steps to
protect its economy from the impact of the coronavirus outbreak
and a buoyant dollar stemmed some inflows into safe-haven
assets.
Spot gold XAU= fell as much as 1% and was down 0.8% at
$1,577.11 per ounce as of 1321 GMT.
Prices touched the highest since Jan. 8 earlier in the
session. U.S. gold futures GCcv1 shed 0.4% to $1,581.70.
China's central bank unexpectedly lowered the interest rates
on reverse repurchase agreements and injected 1.2 trillion yuan
($171 billion) of liquidity into markets as authorities sought
to relieve pressure on the economy from the rapidly spreading
virus. "Uncertainty is generally supportive for gold but we have
also seen China taking measures to support the economy. This is
something financial markets are taking positively," said Julius
Baer analyst Carsten Menke, adding that a rebound in the dollar
was adding to gold's weakness.
European and U.S. shares were a little higher, but a gauge
of global stocks hovered near seven-week lows. The U.S. dollar
was up about 0.3% against its main rivals, having recovered from
a two-week low touched in the previous session.
MKTS/GLOB USD/
"Once we get through this 'band-aid effect', the reality
will set in that there is an economic tumult about to happen in
China, which is going to spread globally and force a lot of
central banks to cut rates," said Stephen Innes, chief market
strategist at AxiCorp.
Lower interest rates reduce the opportunity cost of holding
the non-yielding bullion.
Physical gold markets in major Asian hubs saw activity
dwindle last week as the epidemic took a toll on demand,
especially with top consumer China out of action. GOL/AS
People's anxiety about going out because of the outbreak
during the Lunar New Year holidays in China, usually a strong
seasonal driver for bullion demand, will have a negative impact
on the gold market, said Julius Baer's Menke.
Speculators cut their bullish positions in COMEX gold
contracts in the week to Jan. 28, data showed on Friday. CFTC/
Elsewhere, palladium XPD= was up 0.6% at $2,290.92 an
ounce, silver XAG= fell 1.5% to $17.76, while platinum XPT=
fell 0.1% to $955.57.
($1 = 7.0155 Chinese yuan renminbi)