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Interviewed by Dubai TV, Mohammed Hashad, Head of Research and Development at Noor Capital and member of the American Society of Technical Analysts, shed light and commented on the developments in financial markets and developments in the situation around gold and Russia.
Britain joins in banning Russian gold imports, and Russia is the second-largest exporter of gold in the world; how will this affect gold prices? Will it rise as a result?
Hashad noted that since the beginning of the Russian invasion of Ukraine, England and the United States have sought to bring allies against Russia. Today, there will be more volatility in the movement of gold, as Russia is the second-largest producer of gold in the world and a stronghold of mining companies. This ban planning is one of the ways to increase pressure on Russia and obstruct its financing of the war. Therefore, we may witness more fluctuations in the price of gold, leading to more rise during today’s or tomorrow’s session.
Will pressure from Britain, the United States and the European Union on Russia affect inflation?
Hashad explained that inflation rates worldwide continue to rise at their highest levels in more than 40 years, and in the United States are approaching their highest levels in 1981. The continuation of those political and geopolitical tensions would push inflation rates up. We now see banks. The central bank is heading to raise interest rates, but inflation is not responding to high-interest levels.
How will this affect individuals, especially with the US raising interest rates at every meeting?
This will lead to a higher standard of living for individuals, Hashad said. Fears are sweeping the markets of high unemployment rates if the United States increases interest rates. Continuing to raise interest rates to these levels may lead to stagflation.
We have witnessed in the past weeks that there are speculations that the United States will enter a recession of 80%, which may affect the labor markets and unemployment rates in general.
USD
As for the dollar’s performance today, it suffered from a decline after speculation of a US interest rate hike next month by about 25 points. Commenting on this, Hashad said, “The markets have previously priced in the interest rate hike by the Fed.
And we witnessed the dollar decline for the first time in a month after it reached 104 levels, the last speech of Jerome Powell and his testimony before the Senate was marked by a significantly different tone, and the markets, especially the stock markets, price clearly that interest rates will not reach the peak and he may be slow to continue raising interest rates.
ECB
The negotiating table is the debts of the European bloc, which burdened Greece and Italy. Accordingly, Hashad believes that Christine Lagarde must discuss setting up an urgent plan for this debt and raising interest rates.
As for the Russian side, it will have reactions. Christine Lagarde will also talk about raising interest rates and say that raising interest rates will be a loss of 25 basis points, starting from 50 points, as the markets expect.