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Mohammed Hashad, Head of Research and Development at Noor Capital, and member of the US Association of Technical Analysts, commented on the key developments across markets and the performance of the most important assets, in an interview on Dubai TV.
Asked whether tensions in the Red Sea could push oil prices to rise for the third week, Hashad noted that the prices of US crude oil futures contracts started this week’s trading with uptrend on the rise in an attempt to maintain the recent gains for the third session in a row. Prices have begun to attack the psychological barrier of $73 per barrel and are now hovering around the $73.40 per barrel level.
Hashad also pointed out that the continuation of political and geopolitical tensions, in addition to the current unrest in the Red Sea, continues to dominate the main market scene, in general, and affects investors’ sentiment.
There is a state of fear about the scarcity of supply and the possibility that the movement of oil will witness a disruption in supplies in the near term, and therefore, prices are supported from time to time.
Hashad also explained that there is another factor pushing prices to further surge, which is the recent report issued by the International Energy Agency, which indicates the possibility of improving global demand for oil, in addition to the extremely cold weather in the United States of America, which led to the closure of some major drilling rigs and resulted in a supply disruption. Nearly 40% of production levels are in the USA.
Speaking of US stock markets, and how they achieved strong gains over the past trading week and continue to rise, and asked what the reason behind this rise is, Hashad said that there are collective record gains for the American stock market, and he believes that the reason for this surge in US stocks is the significant improvement in risk appetite, as risk appetite has increased in the markets, which is evident from the VIX index, which is responsible for the fluctuations of the American market. Which fell towards the level of 4.72.
Another key factor that enhanced the upward momentum in stocks was the significant rise in technology sector stocks, most of which were remarkable stocks including Microsoft, Nvidia, Meta, and Alphabet, all achieving record gains, spreading a state of positivity in the markets.
In addition to reaching a draft law that would avoid the US government shutdown, which would allow funding some government programs until the first of next March. Consequently, these factors combined to push stock prices higher, as the Nasdaq index achieved weekly gains of about 480 points, estimated at 2.85. In addition to the gains of the Dow Jones Industrial Average, which is currently stable above the level of 38 thousand, according to Hashad.
As for gold, between its status as a safe haven, the rise of the dollar, fading expectations, and the imminent decline in interest rates soon, and how gold’s movements are technically charted in the short term, Hashad indicated that in the short term, technically speaking, gold trading will be limited during this week’s trading until it is confirmed that the main support level for the current trading levels at $2,016 per ounce is broken or the pivotal resistance level at $2,065 per ounce is broken.
He also explained that the variation in economic indicators that recently appeared, shows that gold is still torn between rising levels of inflation and the possibility that the Federal Reserve will reduce or stabilize interest rates during the upcoming March meeting.
One of the reasons why gold’s performance is at the current level, in addition, is the US retail sales data, which showed a significant improvement, indicating improved demand in the United States. This affects demand levels. In addition to strong labour market data, which affects consumer spending and may lead to higher inflation.
Finally, talking about the Central Bank of Japan meeting, and asked about expectations for Japanese interest rates, Hashad stated that the Bank of Japan will continue to adhere to the policy of monetary easing and that interest rates will remain at negative levels.
