Dubai TV Interview, Nov. 15, 2021

Director of Research and Development at Noor Capital and member of the American Association of Professional Technical Analysts, Mohamed Hashad, was a guest on Dubai Channel to comment on the most outstanding developments in the financial markets today and throughout the current week.

US-China Virtual Summit in Spotlight

The markets are awaiting the virtual US-Chinese summit, as well as the most prominent files and issues on the agenda of the bilateral talks and whether the event constitutes a signal of any possible trade agreement between Washington and Beijing, and since the markets are awaiting the summit between the US President and his Chinese counterpart, Xi Jinping, Hashad stressed that the U. S. Administration presided by Joe Biden has a lot of competence and wisdom to deal with the file of Chinese relations in the summit meeting more clearly and better than the previous summits.

“I believe that U. S. President Joe Biden wants to avoid the cold economic war between Washington and Beijing that erupted during the era of his predecessor, Donald Trump, and had many negative effects and consequences on the markets in general.” Hashad said.

“I think Joe Biden is keen to keep all channels of communication with China open, despite recent Bill passed by Congress that have been blessed by both Republicans and Democrats to prevent Chinese companies, threatening American national security, from obtaining any license or acquiring any equipment in the United States, the most important highlight of the Biden-Xi summit It is the discussion of means and ways to manage the economic competition between the two countries, and the problem of customs tariff.

The U.S. Dollar
Commenting on the US dollar approaching its highest level in 16 months, against major currencies, and the reasons behind the strength of the US dollar, Hashad pointed out that a wide range of factors from which the dollar benefited greatly, to name some, the decision of the Federal Reserve to taper asset purchases which; a decision that markets have been digesting during last week, the dollar also benefited from the success of the U. S. economy to add nearly 455,000 jobs, which gave the dollar a lot of uptrend momentum, together with clear indications that the U. S. economy could recover and reap more bullish momentum before the beginning of the fourth quarter of the current year.

Gold Prices
Gold prices retreated today, despite the availability of all the factors that were supposed to contribute to rise in the price of the precious metal, Hashad mentioned that there are many factors that affect gold prices, gold has declined today, and this is true , but in general, gold touched its highest level since last June at $ 1867 per ounce, and this is also true, therefore, gold is now benefiting as a result of high levels of inflation in the United States to its highest levels in three decades, so the precious metal has become a safe haven from inflation and a good investment tool, or rather, a good store of value at the expense of the U. S. dollar.

If some believe that gold does not act as a safe haven, Hashad emphasized that gold, despite any fluctuations, remains a safe haven as a result of the rise in inflation to unprecedented levels, and we can say that good is still a trusted safe store of value at the expense of the dollar and an effective tool for hedge against inflation. “But from my personal point of view, since the beginning of the first quarter of this year, most central banks were supposed to raise interest rates, but they refrained from such a decision in the previous few weeks, and with raising interest rates on the U. S. dollar, I think that gold will be below the $1600 level per ounce”, Hashad added.

Crude Oil
Regarding his expectations for oil prices, the Director of Research and Development Department at Noor Capital indicated that there are more declines and there are some factors that began to put pressure on oil prices, including but not limited to; renewed concerns about the outbreak of the Corona virus infection that have returned worldwide, in addition to parallel concerns on a probable decline in global demand for oil, and the possibility of a large surplus in the market, with continued pressure from the U. S. side and the White House threatening to use the American strategic reserve of crude oil stocks.