Noor Capital | Dubai TV Mohammed Hashad’s Interview, August 1

Interviewed by Dubai TV, Mohammed Hashad, Head of Research and Development at Noor Capital and member of the American Association of Technical Analysts, shed light on the latest developments in the financial markets:

Despite the Federal Reserve raising interest rates by 75 basis points, the US markets are performing positively; how do you explain this and is the US economy improving?

Indeed, there was a record rise in the US stock markets, and I think it is a phenomenal rise after 6 months of continuous decline.

Market sentiment improved as the tech sector rescued US stocks, with tech giants such as Amazon and Apple beating expectations and pushing US markets higher, with the Dow Jones Industrial Average posting monthly gains of over 6% and the broader S&P gaining more than 4.8%.

Suppose there is more good results in the upcoming earnings reports; in this case, we may witness more stability or a ceiling for losses for the US markets, but the general look remains bearish as long as the negative repercussions of the Russian-Ukrainian wars continue to affect the markets.

There is a lot of talk about an economic slowdown and entering a recession. But, can we say that we entered an economic recession?

Leading economic indicators point to more decline. There is a decline in direct investment, government spending, and consumer confidence; some indicators point to some positivity. There is a moderate situation in the labor markets, and unemployment rates are still low; my personal view is that the economy is slowing down, and we are not in a recession.

To what extent will gold benefit in light of these factors?

Gold benefited greatly from the decline in the US dollar. In addition, the markets’ fears of a recession outweighed the markets’ fears of inflation, all of which pushed gold prices to rise. Gold is based on the $1755/ounce level, now trading around $1773/ounce, and I think the $1780 and $1800 levels are the target levels in the near term.

The US dollar is on the decline; will the decline continue?

The US dollar lost most of its recent gains and is trading around its lowest level in 3 weeks. There are fundamental factors that pressured the US dollar, such as the US economy contraction by 0.9. Also, there is a high ceiling of speculation that the next move by the Federal Reserve will be less calm and raise interest rates by only 50 basis points. In addition to negative data that pressured the Dollar, my view is that it is a temporary drop, and this downward correction will not last long.