Noor Capital | Interview with Mohammed Hashad on Dubai TV – January 16, 2023

Interviewed by Dubai TV, Monday, Mohamed Hashad, the Head of Research and Development at Noor Capital and the member of the US Association of Technical Analysts, commented on the most important developments in global financial markets on the first day of the current trading week, with a special focus on the following:

https://www.youtube.com/watch?v=bSzsRoKfXLo

Crude Oil Prices

In the very beginning, Hashad commented on the performance of the oil market, following a series of gains achieved by the black gold, despite oil’s tendency, at the beginning of Monday’s trading, to correction, but the optimism about the Chinese economy is counterbalancing, on the other hand, some concerns on the European arena.

Asked where oil prices are heading and how the performance of current oil prices could reflect on OPEC’s upcoming decision, particularly as February is looming, Hashad replied: “Crude oil has already achieved good gains during last week’s trading, and it also started the new trading week’s trading heading towards the $80 per barrel level, thanks to several factors that came together to support oil prices, foremost of which is optimism about reopening of the Chinese economy and the country’s ceasing of restrictions related to Covid-19, and then the return of air flights to and from China. The reopening of the Chinese economy was the main reason for the latest surge of oil.

Hashad added, “However, there are still concerns that may have prompted oil to start the first trading session this week, Monday, shyly with a marginal decline, including concerns about the possibility of the virus continuing to spread in light of the high number of infected people, amid investors’ anticipation of the OPEC’s upcoming meeting”. Hashad believes that the most important matter to focus on concerning next OPEC meeting is consumption, or rather discussing concerns related to the possibility of declining consumption as a result of the economic slowdown in in both the United States and Europe.

In light of market data, especially optimism about the Chinese economy, a lot of news and reports shed light on the reopening of the Chinese economy, and asked about the possibility of oil trading at $100 per barrel, which is the level that several financial institutions talked about, including Morgan Stanley, and whether the markets could see oil trading at the $100 level? Hashad replied: “We may soon see the $100 a barrel level, but at the present time, markets tend to deal with actual data amid mixed realities in the markets with regard to energy markets, in general, and amid the challenges created by the developments of the Russian-Ukrainian conflict since its outbreak”.

Hashad also believes that In the near term, and with the return of the main central banks to slower pace of raising interest rates, a barrel of oil may trade around the $100 level, and asked how long this could take, Hashad noted that the rise in oil to the aforementioned level could happen as soon as major central banks begin lowering interest rates or rather simply by slowing down the pace of interest rate hikes.

Gold Prices

Moving on to gold prices, which successfully broke important resistance levels, it is possible for gold to break the $2,000 per ounce level during the coming months. “Gold prices recorded, Monday, at the opening of the trading session, at $1930.00 an ounce, and was able to rise on the shoulders of the declining US dollar, gold even took advantage of the declining Treasury bond yields and the decline in the performance of the dollar. Gold generally seems stable above $1850.00 an ounce”, Hashad said, adding that “with central banks tending to end the tightening cycle of monetary policy and their tendency to replace it, instead, with policy easing, this important development could likely benefit gold prices, and the markets may see more gold gains to $1950.00 and even $2000.00 per ounce as soon as central banks begin to gradually reduce interest rates, after they approach target inflation levels, at 2% in the US case, for example.

Equities

As for China, amid a wave in equity markets, namely the purchase of shares in major Chinese companies, with news reports on buying shares totaling $ 3 billion within a short period of 10 days, and how this could happen at a time when the International Monetary Fund warned that the current year may be worse than the previous year, Hashad commented that from time to time, investors tend to adopt riskier assets, led by stocks, and stock markets in general, and specifically stocks in the Chinese market, took advantage of the decline in US inflation to 6.5% as well as the discussions about ending monetary policy tightening as well as bets on the Fed raising interest rates by 25 basis points, instead of 50 basis points, well the markets are now preoccupied with discussions about a remarkable turning point: when the Fed could begin to shift from quantitative tightening to quantitative easing, These discussions gave impetus to investors in general, and there is optimism that dominates the markets with the reopening of the Chinese economy, which encouraged investors to buy shares worth more than $ 3 billion during the past trading days.

Russia

Briefly commenting on the increase in Russian gas exports to China, and whether this could be used as an indication that Russia has already succeeded in creating an alternative market for its gas or that it has been able to compensate for its previous losses, in light of the speech by the Russian president, which the markets saw through most channels, Hashad believes that the operational state of energy in Russia strongly indicates that Russia has achieved noticeable success despite all the challenges that appeared since the outbreak of the Russian-Ukrainian conflict, as the markets sees an increase in Russia’s revenues from crude oil and natural gas by 28%, an increase in its exports by 7%, in addition to an increase in oil production by 2% indicating that Russia has already succeeded in compensating for its losses.