The demand for safer assets like Gold, Yen and UST could be underpinned, after Trump's "Fire and Fury" hawkish comment against North Korea. His comments came after his success to proceed new sanctions through the security council against North Korea which seemed unfazed of these sanctions which have found no resistance from China. After Trump’s administration last week announcement that it is preparing currently to investigate about the Chinese violations of the intellectual properties. After keeping existence close to their all times highs, both of Dow Jones and S&P 500 indexes retreated triggering more demand for safe haven. The Greenback has been already boosted by higher interest rate outlook could drive the UST yields up weighing down on the demand for risky assets. The gold could overcome last Friday losses trading currently near $1265, after steep diving to $1251 following the release of last July labor report which has shown retreating of the unemployment rate to 4.3% and adding 209k of jobs out of the farming sector. The market participants are now pricing in one more interest rate hiking by the end of this year by 0.25% and starting of unwinding The Fed's $4.5 trillion balance sheet with the beginning of the fourth quarter of this year.
After the FOMC members have already to referred to relatively soon reduction of the Fed's balance sheet to start by $10 billion a month cap"$6 billion from Treasuries and $4 billion from mortgage-backed securities", before rising every 3 months by this same scale, until the caps amount reach $30 billion of US treasuries and $20 billion of MBS.
Now the focusing would be on the inflation pressure in US, After The FOMC assurance on the current low inflation pressure which made it in no rush to raise rates giving further last July. The FOMC has mentioned in its recent economic assessment that it will be monitor closely the inflation developments. So, The markets eyes will be directed by the end of this week to the release of US CPI of July which is expected to show by God's will yearly rising by 1.8% following increasing by 1.6% in June has been the weakest since October 2016. The core figure excluding food and energy is expected to show also ascending by 1.8% YoY, after rising by only 1.7% in June and also in May. XAUUSD-09-08-2017 06-07-22 ص.jpg
The gold could form a higher low at $1251.43 above its previous formed low at $1243.77 which came in its ascending way from its second bottom at $1204.85which came above last Mar. 10 bottom at $1194.98.
The Gold could revive its existence above its daily SMA50, its daily SMA100 and daily SMA200 by bouncing up from $1251.43
XAUUSD daily Parabolic SAR (step 0.02, maximum 0.2) is reading today $1270.92 in its 5th day of being above the trading rate, after retreating from $1274.04 which is still forming a lower high below $1296.16.
XAUUSD daily RSI-14 is still referring to existence inside its neutral area reading 59.770.
XAUUSD daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line in its neutral territory at 42.690 leading to the upside its signal line which is lower in the same area at 34.575.

Important levels: Daily SMA50 @ $1250.83, Daily SMA100 @ $1252.92 and Daily SMA200 @ $1229.77
S1: $1251.43
S2: $1143.77
S3: $1204.85
R1: $1274.04
R2: $1296.16
R3: $1337.31
Have a good day
Kind Regards
Global Market Strategist
Walid Salah El Din
Mob: +20 12 2465 9143