Gold slips below $1580 level amid improving risk sentiment

• Gold retreats from two-week tops amid receding demand for traditional safe-haven assets.
• The USD remains well supported near 4-1/2 month tops and collaborates to the weaker tone.

Gold edged lower on the first day of a new trading week and for now, seems to have snapped two consecutive days of winning streak.

The precious metal failed to capitalize on its recent positive move to near two-week tops and edged lower during the early European session on Monday amid fading safe-haven demand.

Gold weighed down by a combination of factors

As investors assessed China's latest restrictions to prevent the spreading of the deadly coronavirus, a slight improvement in the global risk sentiment weighed on traditional safe-haven assets.

It is worth reporting that China has told around 60-million people in the Hubei province to stay at home unless there is an emergency and the use of private cars have been banned indefinitely.

This coupled with the fact that the number of new cases has been dropping over the past three days further eased market concerns collaborated to the mildly weaker tone surrounding the commodity.

Meanwhile, the US Dollar Index stood tall near 4-1/2 month tops, which exerted some additional pressure and forced the dollar-denominated commodity to erode a part of its gains recorded on Friday.

It, however, remains to be seen if a modest downtick to $1580 level marks the end of the recent positive move or attract some dip-buying amid thin liquidity conditions on the back of a holiday in the US.

Technical levels to watch