Noor Capital | Dubai TV Mohammed Hashad’s Interview, July 4

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 of the financial markets:

First: Stock market

The equity market has tried to recover as markets observed during last week in the US market, asked whether there is an opportunity for rebounding, Hashad indicated that there have been already some highs that were touched by the end of last week, but now we are talking about US stocks. Hashad also believes that the reason for stock’s surging, namely the Dow Jones, which tried to touch the 31,000 level, was that the Index benefited greatly from the latest comments by Federal Reserve Chairman Jerome Powell who said that there is still a possibility of returning to inflation levels of about 2%.

Nevertheless; Hashad believes this is not an obvious sign for the beginning of a new recovery, on the contrary; economic conditions now suggest that there could follow a decline in equities amid the return of recession concerns dominating the financial markets in addition to monetary policy tightening with additional interest rate hikes which could add pressure on stock markets in the near future.

Second: Gold

Under the latest Western decision to ban Russian gold imports, asked whether gold prices could surge as a result or touch fresh highs, Hashad explained that gold did not benefit last week from this ban-linked news headlines, but rather, gold price fell to its lowest level at $17,380 per ounce, the largest quarterly loss. Hashad also noted that if political and geopolitical tensions increase, particularly concerning the Russian-Ukrainian conflict, markets could see surging gold prices again.

Gold is now trading around a pivotal level of $1,800 per ounce, and Hashad believes that unless markets see trading below that level, some highs are likely to be achieved, but if this level is breached, we may see a strong selloff wave initially targeting $1,750 per ounce.

Third: Oil

Asked about JP Morgan’s warnings that oil prices could rise by 240% to $380 per barrel if Russia significantly cut production in response to the Western plans to curb the country’s energy prices, and whether this could happen, Hashad said that he believes this could happen, but those levels seem exaggerated, but we are likely to see levels above $110 and $120 per barrel, particularly given the fact that oil prices largely weigh the idea that any lack of market supply would benefit and support prices. There are also some factors driving oil prices upwards.

Libyan oil fell to one third of 2021’s output level, and OPEC production has fallen by about 28.52 million barrels per day by less than 100,000 barrels from last month. If the Russia decides to cut production, we may see high levels of oil prices above $120 per barrel.

Fourth: Important economic data

Markets are looking forward to several important data this week, including the US NFP data; Jobs Report. Hashad believes US jobs could do well and unemployment rates may fall. Hashad also believes that the US dollar could be further supported by the beginning of this week.