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  • Gold consolidates gains from $1,875 while staying above $1,864.
  • Market sentiment stays mixed with S&P 500 refreshing record high, US 10-year Treasury yields being sluggish.
  • Stimulus, vaccine headlines favor bulls amid Brexit uncertainty and rising infections.
  • China CPI will decorate the calendar, risk catalysts to remain as the key.

Having refreshed a two-week high to $1,875, gold keeps strength, despite recently easing, while taking rounds to $1,870 as Wednesday’s Asian session begins. Global markets trade mixed as equities benefits from stimulus talks in the US and Japan, as well as the coronavirus (COVID-19) vaccine. Though, uncertainty surrounding Brexit, US-China trade relations and record-high covid numbers from America probe the bulls.

Stimulus, Brexit, vaccine and China are the four pillars of market…

While the Democrats and Republicans are moving closer to the much-awaited US COVID-19 stimulus, US Senate Democratic Leader Chuck Schumer said, “ongoing bipartisan negotiations are the best way forward for reaching a deal on coronavirus relief legislation.” Earlier in the day, House Republican Leader Mitch McConnell said he favors passing a basic coronavirus aid package without provisions on liability and state and local aid that are dividing lawmakers.

Unlike the US policymakers, the UK and the European Union (EU) diplomats aren’t agreeing on the keenly eyed Brexit deal. Even if the British Cabinet Minister Michael Gove announced an in-principle deal, the bloc leaders have a difference in communications. UK PM Boris Johnson will travel to Brussels on Wednesday to meet the EU President Ursula von der Leyen for a final push and solve the mess.

Elsewhere, the UK has begun vaccinations and the world has the hope to overcome the pandemic. However, the virus figures from the US have been worrisome with record-high infections and death tolls.

It should also be noted that the recent arrest of Hong Kong opposition members by the police and the US sanctions on 14 Chinese diplomats renew fears of the Sino-American tussle.

Against this backdrop, Nasdaq and S&P 500 refresh record high while the US 10-year Treasury yields drop one basis point (bp) to 0.92% by the end of Tuesday’s North American trading.

Looking forward, November’s inflation data from China, expected to print welcome figures, will entertain intraday traders while risk catalysts will be the key to watch, especially relating to trade, politics and the virus.

Technical analysis

Sustained trading beyond $1,850 enables the gold buyers to aim for a 50-day SMA near $1,878/79, a break of which will eye the mid-November tops around the $1,900 mark. Meanwhile, 21-day SMA close to $1,845 adds to the downside support.