Commenting on Key Financial Assets: An Interview with Mohamed Hashad, Chief Strategist at Noor Capital and Member of the American Association of Technical Analysts, on Dubai TV
Interviewer: Mr. Mohamed, we’ve been following the trade agreements with several countries, most notably Japan. Can it be said that Trump has indeed succeeded in fulfilling his promises, and that the agreements are leaning primarily in favor of the United States?
Hashad: Yes, he has succeeded in fulfilling his election promises, and he has also raised a significant amount of money, close to 30 billion dollars, by August 1st. Preliminary data indicates a preliminary agreement between the United States and the European bloc. This agreement includes imposing tariffs of up to 15% on imports from Europe to the United States, similar to the Japan agreement, but at a lower rate of 25%. The initial terms of this agreement suggest that some tariffs may be waived for essential products, such as medical equipment, devices, airplanes, and others. This agreement has eased market tensions and positively impacted all sectors of the markets. However, the question remains: is this a truce, or is it a temporary agreement until the specified date in early August? I believe if this agreement fails between Europe and the United States, EU countries will impose retaliatory tariffs on the U.S.
Interviewer: In light of that, we have observed a sense of optimism in various markets, including Japan and Asia. Can we say that this performance is a quick reaction, or is there a long-term view here?
Hashad:: Yes, it is a quick reaction because markets are always eager to hear any positive news. However, in general, I believe that the stock market is one of the best tools for long-term investment, especially when the Federal Reserve starts lowering interest rates in September. There is an overall sense of optimism in the stock markets—Asian, European, and American. Risk appetite has revived in the markets, and investor sentiment has improved regarding this agreement. Asian stocks have greatly benefited from Japan’s outperformance, particularly in the automotive sector. U.S. stocks have also benefited from the tech sector after Alphabet Inc. posted stronger-than-expected results in the second quarter of this year.
Interviewer: Regarding oil markets, we’ve also seen optimism in the oil markets. If the series of trade agreements continues, can we say that the increases from OPEC+ will actually be absorbed by the markets?
Hashad:: After several consecutive sessions of losses, U.S. crude oil futures have risen again, posting gains of over 1% during the day, supported by optimism between the U.S. and Europe, and also by the Japan agreement, which is expected to ease pressure on the global economy. Oil has also benefited significantly from the decline in U.S. inventories, which reflects how the market can absorb the upcoming increase of 411,000 barrels per day from OPEC.
Interviewer: Regarding gold, we have noticed that investors are moving away from gold as a safe haven in light of the trade agreements news. Will we see a correction wave? Are there actual buying opportunities?
Hashad: The gains achieved by gold earlier this week, nearing the recent peak of 3500, have faded. It reached its highest level of 3400 dollars per ounce, but with signs of an agreement between the two parties and the diminishing fears of a trade war, investors temporarily moved away from gold amid profit-taking. After this strong rise, we saw a retreat to 3360 dollars per ounce. However, with ongoing political and geopolitical tensions, I believe that any downward correction could present a good buying opportunity.
Interviewer: In brief, Mr. Mohamed, regarding gold, if the agreement with the European Union succeeds, will we see an increase in the correction process that gold might experience?
Hashad: Yes, we may see a new peak as well.
Interviewer: What point could we reach?
Hashad: Above the 3500-dollar level? We could reach 4000 dollars per ounce.
Interviewer: Yes, the picture is clearer now. Mr. Mohamed Heshad, Head of Research and Development at Noor Capital and a member of the American Association of Technical Analysts. Thank you.