Dubai TV Interview, June 28, 2021

Speaking to Dubai TV on Monday, Mohamed Hashad, Director of Research and Development at Noor Capital, discussed the current situation across global markets, with anticipation for a number of developments over the course of the week.

USD

The U.S. Dollar (USD) has retreated from a nine-month high, opening the week leaning downwards amid a correction wave due to mild selling pressures after the greenback built on the recently disclosed plans by the Federal Reserve to scale back asset purchases and move towards policy normalization from the easing policies and interest rates.

Despite the pressures on the USD, it remains on a generally upward trend with expectations that the Fed might begin the process of raising interest rates soon.

Gold

The yellow metal is trying to benefit from the USD’s decline but remains mostly moving horizontally, with anticipation for remarks by the Fed Chair Jerome Powell, at the annual Jackson Hole annual conference, and the readings of major economic indicators.

It is likely that any rises to the $1,700 per ounce area will lead to further gains to the level of $1,830, while failing to maintain the support level of $1,767 could lead to increased pressures, pushing gold downwards to the level of $1,735.

Oil

Many factors are pressuring crude oil prices, with losses of more than 7% last week, and prices reaching the level of $61.84 a barrel. The spread of the Coronavirus Delta variant is posing more pressures, amid concerns about lower demand for oil and an economic slowdown in major economies, after recent data showed that retail sales and factory activity in China were weaker than expected, alongside the recent surge in U.S. oil rigs, which are all factors. This is leading to increased selling pressures from retail and institutional investors.

What to look for this week?

Markets will closely monitor U.S. growth data and remarks by Fed Chair Jerome Powell, which might include clearer signals regarding cutting the asset purchases and ending the current easing cycle. Any movement towards higher interest rates will not be the best environment for stock prices, which might begin to dwindle in the coming period, moving in a mostly downward trend.