The geopolitical concerns sent the gold well above $1300 per ounce, after North Korea fired new missile over Japan. The Japanese yen could be well-buoyed, before the Asian session as a low yielding funding currency. The news drove USDJPY down to 108.33 waiting for response from US and Japan. The risk aversion contained the market sentiment weighing down on the Asian equities opening send the US major indexes future rates down. S&P 500 future dropped to be now in intersection with its daily SMA100 again. The equities markets could hardly overcome the escalating tensions between US and North Korea which contained the market sentiment previously following Trump's "Fire and Fury" comment. But the shy try to forget that risk and revive the risk appetite could not send the Gold far away below $1300. The Gold which was trading close but below this psychological level is now having clear breaking out of this resisting area which stopped it several times before to be exposed now to stop selling orders and increasing of the upside momentum, after opening this new range of trading. The US equities have been actually undermined by the outcome of Hurricane Harvey which dampened the insurer companies shares and mining activities in Texas and the Gulf of Mexico. After Gary Cohn's try to revive the hope of reflation by saying that he expects tax reforms to be passed this year denying his intention to resign over Trump’s reaction to riots in Charlottesville. While Trump is still stick to his threat of shutting down the U.S. government, if he is unable to get funds to build a wall along the Mexican border. USD has been actually depressed by Yellen's refraining from sending new signals about the monetary policy adding to uncertainty, while the worries were ascending about the inflation outlook in US. Dallas Fed president Robert Kaplan called for patience in waiting for prices to go higher and Federal Reserve Bank of Cleveland President Loretta Mester urged her colleagues to look past recent weak inflation data and to stick to their gradual pace of lifting interest rates. While Kansas City’s Esther George said another rate hike is still feasible this year, if U.S. data holds up. So, the markets eyes will be directed next to the release of US Q2 GDP second reading which is expected to show next Wednesday upward annualized growth revision to 2.7%, after the preliminary reading has shown growth by 2.6% following 1.4% expansion in the first quarter.
The FOMC expected last June 2.2% annualized GDP growth rate this year from 2.1% it expected in March.
There will be also focusing by the end of this week on the release of August US Labor report which is expected to show adding of 180k of jobs out of the farming sector, after gaining 209k in July.
The market participants will pay also their attention to the wages inflationary pressure in US when they read the average hourly earnings which are expected to show growth monthly by 0.2% in August, after rising by 0.3% in July.
The Gold could have another bullish sign by surpassing $1300 which stopped it on Aug. 18, after it could previously form another higher low at $1267.27 above $1251.16 to come in its ascending way from its second bottom at $1204.85which came above last Mar. 10 bottom at $1194.98.
The Gold could keep its existence based above its daily SMA50 and its daily SMA100 by bouncing up from $1251.43, after the rebounding from $1204.74 brought it back above daily SMA200.
XAUUSD daily Parabolic SAR (step 0.02, maximum 0.2) is reading today $1274.57 in its second day of being above the trading rate, after dipping to $1274.57 last Friday.
XAUUSD daily RSI-14 is referring now to existence inside its overbought area above 70 reading 71.485.
XAUUSD daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line in its overbought territory at 88.336 leading to the upside its signal line which is still in the neutral area at 71.839.

Important levels: Daily SMA50 @ $1257.55, Daily SMA100 @ $1258.64 and Daily SMA200 @ $1231.87
S&R:
S1: $1267.27
S2: $1251.16
S3: $1204.74
R1: $1337.37
R2: $1375.20
R3: $1392.09
Have a good day
Kind Regards
Global Market Strategist
Walid Salah El Din
Mob: +20 12 2465 9143