Dubai TV Interview, Sept 13, 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.

The U.S. Inflation

We can say that inflation levels are the main driver of the markets during this week’s trading and will have a significant impact on the market sectors, whether the currency markets, stocks or commodities. I believe that inflation levels will come higher, forcing the Federal Reserve to reduce asset purchases at its next meeting on September 21st. I think that until the end of Q4 2021 and the beginning Q1 2022, it will come on higher until the Fed raises interest rates.

U.S. dollar

The markets began pricing news, the US dollar returned as a safe haven, and we see the US dollar index, which measures the strength of the US currency against a basket of currencies above 62 and 65 vs 92.15 latest close. The US dollar is now considered an alternative to gold and investors are focusing on the dollar and the US Treasury yields as a safe heaven.

Oil

One of the most traded assets in the markets is oil, and several factors have combined to push oil levels up, we see a barrel of oil above $70 levels on the decline in inventories for the fifth consecutive week, in addition to the continuing fears about the oil supply due to Hurricane Ida, which led to the disruption of more than half the production of the Gulf of Mexico equivalent to 1.4 million barrels in addition to the political turmoil of Libya as the largest oil producer in North Africa. I think we will see the $72 levels soon.

Gold

Gold is now stable, but is suffering from the dollar’s rally and failed to stabilize above the $1,800 barrier. Hashad believes that on the technical side, the stability of trades below the resistance level of 1,799 will force gold to decline further towards levels of 1,774, especially if the inflation levels are high, which will give the impression that the US Federal Reserve will inevitably reduce asset purchases, which will benefit the dollar at the expense of gold.

Bitcoin

There is a clear downturn in the cryptocurrency sector. There are warnings from most central banks despite El Salvador’s announcement that it considers Bitcoin as an official currency. There is a warning from the Securities Exchange in Britain as well and some businessmen in the United States prefer that Bitcoin be a tool for payment rather than an investment tool.