Gold recovers losses, turns positive above $1270 on risk aversion

• Precious metal finds demand as a traditional safe-haven.
• Russia probe continues to impact market sentiment on Monday.
• 200-DMA remains as a tough support to crack.

The XAU/USD pair gained traction during the American trading hours and recovered its daily losses to move into the positive territory as the political turmoil in the United States pushed investors to safer assets. At the moment, the pair is at $1275, adding 0.07%, or $0.75, on the day.

Eyes on Mueller investigation of Russian interference in US election

A Bloomberg report on Monday claimed that George Papadopoulos, a former foreign policy adviser to the Trump campaign, pled guilty to providing false information during an FBI investigation earlier this year and noting that Donald Trump had several meetings with top Russian leaders during the election campaign. With the weakening appetite for riskier assets, major equity indexes in the U.S. turned south with the Dow Jones Industrial Average and the S&P 500 both losing 0.35% at the time of writing.

On the other hand, the greenback is struggling to stretch last week's rally as investors expect Jerome Powell, considered a moderate, to be announced as the next Fed chair this Thursday. The US Dollar Index is now at 94.56, losing 0.17% on the day, and supporting the pair's bullish move.

• US Dollar stays in red near 94.70

With no more data left in the remainder of the session, the market sentiment is likely to drive the pair's price action. 

Technical outlook

The 200-DMA, which is located at $1266, was able to act as a strong support last week, allowing the pair to retrace a majority its $20 loss. As long as the pair closes the day above that level, it's likely to extend its recovery rise. $1283 (20-DMA) aligns as the first resistance ahead of $1291 (Oct. 19 high) and $1300 (psychological level). On the downside, with a decisive break through $1266 (200-DMA), the pair could aim for $1260 (Oct. 6 low) and $1251 (Aug. 8 low). The CCI indicator on the daily graph is edging higher towards the 0 mark, suggesting that the bearish momentum is losing strength.