Gold (XAU/USD) hangs near the lower end of the daily range during the first half of the European session on Wednesday, though it manages to hold above the $4,200 mark amid mixed cues. A generally positive tone around the equity markets is seen as a key factor acting as a headwind for the safe-haven precious metal. Furthermore, bulls opt to wait for important US macro releases for more cues about the Federal Reserve's (Fed) rate-cut path and placing fresh bets around the non-yielding yellow metal.

In the meantime, firming expectations that the US central bank will lower borrowing costs at its upcoming policy meeting next week keep the US Dollar (USD) depressed near a two-week low and offer some support to the Gold price. Moreover, persistent geopolitical uncertainties stemming from the protracted Russia-Ukraine war and the risk of a further escalation of conflict turn out to be another factor that helps limit the downside for the safe-haven precious metal. This warrants some caution for the XAU/USD bears.

Daily Digest Market Movers:

Gold traders seem non-committed as receding safe-haven demand counter Fed rate cut bets.

Recent US macro data pointed to a gradual cooling of the US economy. Moreover, dovish signals from Federal Reserve officials bolstered expectations for a 25-basis-point rate cut at the upcoming FOMC meeting next week.

According to the CME Group's FedWatch Tool, traders are pricing in a nearly 90% probability of the move, which keeps the US Dollar depressed through the Asian session on Wednesday and supports the non-yielding Gold.

Reports suggest that White House National Economic Council Director Kevin Hassett is seen as the frontrunner to become the next Fed Chair. Hassett is expected to enact US President Donald Trump's calls for lower rates.

Russian President Vladimir Putin and Trump's envoys Steve Witkoff failed to reach a compromise on a possible peace deal in Ukraine. Adding to this, Putin issued threats that Russia was ready for a war with Europe.

This keeps geopolitical risks in play and turns out to be another factor acting as a tailwind for the safe-haven precious metal. The XAU/USD bulls, however, might opt to wait for US macro data before placing fresh bets.

The US ADP report on private-sector employment and the US ISM Services PMI will be published later today. The focus, however, will remain glued to the Personal Consumption Expenditure (PCE) Price Index on Friday.

The latter would provide more cues about the Fed's rate-cut path, which, in turn, will play a key role in influencing the near-term USD price dynamics and determining the next leg of a directional move for the commodity.