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Gold (XAU/USD) is seen building on the previous day's recovery from levels just below the $4,000 psychological mark, or a one-and-a-half-week low, and gaining positive traction for the second straight day on Wednesday. The global risk sentiment remains fragile amid concerns about the US economy, which keeps the US Dollar (USD) depressed below a one-week high and acts as a tailwind for the safe-haven precious metal.

Any meaningful USD depreciation, however, seems elusive on the back of reduced bets for another interest rate cut by the US Federal Reserve (Fed) in December. This, in turn, might cap the non-yielding Gold. Traders might also opt to wait for more cues about the Fed's rate-cut path before placing fresh directional bets around the XAU/USD pair. Hence, the focus will remain on the release of FOMC minutes, due later this Wednesday, and the delayed US Nonfarm Payrolls (NFP) report on Thursday amid signs of a softening labor market.

Daily Digest Market Movers: Gold benefits from safe-haven flows and softer USD
 

• Investors remain worried about the weakening economic momentum on the back of the longest-ever US government shutdown, which continues to weigh on investors' sentiment and supports the safe-haven Gold through the Asian session on Wednesday.
• Ukraine’s military on Tuesday said that it had struck military targets inside Russia using US-supplied ATACMS missiles. Amid the ongoing conflict, Ukrainian President Volodymyr Zelenskiy will travel to Turkey to revive stalled peace talks with Russia.
• A US special envoy, Steve Witkoff, is expected to join the discussions. However, Kremlin spokesman Dmitry Peskov said that no Russian delegates would attend the talks. This keeps geopolitical risks in play and further offers support to the precious metal.
• The US Dollar struggles to attract any meaningful buyers, though it holds steady near a one-week high amid less dovish Federal Reserve expectations. In fact, several Fed officials recently signaled caution on further monetary policy easing next month.
• Fed Vice Chair Philip Jefferson said earlier this week that the central bank needs to proceed slowly. However, Fed Governor Christopher Waller continued to build the case for further rate cuts amid concerns over the labor market and the slowdown in hiring.
• The US Labor Department reported that the number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased to 1.957 million during the week ended October 18. This suggests an elevated unemployment rate in October.
• Hence, the delayed release of the US Nonfarm Payrolls report for September, due on Thursday, will grab all the attention. This, along with the FOMC minutes, due later today, will offer cues about the Fed's rate-cut path and influence the USD and the XAU/USD pair.

Gold could accelerate positive move once the $4,100 barrier is cleared
 

The commodity on Tuesday found decent support and bounced off the 200-period Exponential Moving Average (EMA) on the 4-hour chart. However, mixed oscillators on the said chart warrant caution before positioning for a further appreciating move. Meanwhile, the $4,100 round figure is likely to act as an immediate hurdle, which, if cleared, might trigger a short-covering rally and lift the Gold price to the $4,152-4,155 intermediate hurdle en route to the $4,200 mark.

On the flip side, the $4,037-4,036 area could protect the immediate downside ahead of the 200-period EMA on the 4-hour chart, currently pegged just ahead of the $4,000 mark. A convincing break below the latter could make the Gold price vulnerable to accelerate the fall towards the $3,931 support before eventually dropping to the $3,900 mark en route to the late October swing low, around the $3,886 region.

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