For the record, I only play monarch, so please feel free to take my advice with (more than) a pinch of salt.
Re: your city location, I agree with madscientist, I’d be settling the horses next for the WCs...after all, you need to pasture and connect them to the capital before you’ve access to them there. Looking at your save, the blue circle 1N of horses is the best long term site (can irrigate through Memphis’ corn if wanted), although it lacks hills. 1S as you have it, is better short term.
IMHO, the other spot I’d look at is 1NE of the gold (you have 1NW in the desert)....in return for losing one forested plain and silk (which can be taken with another city), you (i) get some grassland hills (can windmill and work), (ii) get defensive bonuses from settling on a hill (iii) avoid the 25% infrastructure penalty that a desert city incurs. In either case, I’d be looking to settle near the gold, not only for the commerce, but the one extra happy (meaning an extra tile worked per city or more ability to whip and deal with the weariness.)
After that, it depends on what your scouting reveals IMHO. Discovering good land means another settler, not doing so means war. If the latter, then, with so much of the surrounding land lacking food, you have to ask: how much can your 2nd & 3rd cities contribute to a war effort? Since, IMHO, most of your army production will have to come from your capital, I’d be inclined to turn the surrounding forests into WCs rather than a wonder. (BTW, if you need convincing re: the merits of massing WCs given their 30H base cost vs 50H for HAs, have a look at Sis’ ALC as Hatty.) This, in turn, suggests that, after fishing (for the WB) and masonry, writing (maybe via pottery) is the way to go.
Look forward to seeing how you go.
