Noor Trends News, Technical Analysis, Educational Tools and Recommendations
In an interview conducted by Dubai TV, Mohamed Hashad, Head of Research and Development at Noor Capital and a member of the American Association of Technical Analysts, commented and analyzed the performance of key assets in the financial markets.
Eurozone Economic Outlook
At the start of the week, a series of negative economic data from the Eurozone indicated a clear contraction in both the manufacturing and service sectors of the two largest economies in the European bloc: Germany and France. The Purchasing Managers’ Index (PMI) for manufacturing dropped to 44.8, marking a seven-month low and falling significantly below market expectations of 45.7. A PMI reading below 50 typically suggests contraction, signalling a potential economic downturn for the Eurozone in the third quarter.
As a result, the Euro has weakened against other currencies, particularly the US dollar, now trading around the 1.1100 level. This data intensifies speculation that the European Central Bank (ECB) might opt for an interest rate cut in the upcoming meeting, potentially a more aggressive cut to prevent a recession. There’s a growing expectation that the ECB could reduce rates by more than 50 basis points in an effort to support the economy.
Gold’s Bullish Momentum
Turning to the commodity markets, gold continues its upward trajectory, reaching new record highs, with prices hitting $2,631 per ounce during today’s trading session. The primary driver for this surge is the ongoing political and geopolitical tensions, making gold a preferred safe-haven asset amidst uncertainty. Precious metals have also been benefiting from recent interest rate cuts, particularly the 50 basis point reduction, which makes holding gold more attractive.
Additionally, concerns about a potential recession in the US economy have amplified the demand for gold, further supported by significant purchases from central banks and hedge funds. As long as gold prices remain above the $2,600 mark, there is room for further gains, given the current climate of uncertainty.
Oil Prices and Geopolitical Tensions
Oil prices have also experienced a notable rise, currently trading around the $72 per barrel mark, with a potential move toward the $73.40 level. The primary catalyst behind this surge is the persistent geopolitical tensions in the Middle East, which continue to fuel concerns about supply disruptions.
Moreover, the recent decline of the US dollar, alongside the Federal Reserve’s first interest rate cut in four years and the initiation of a quantitative easing policy, has made oil relatively cheaper for holders of other currencies, thus supporting the price increase.
Cryptocurrencies: Bitcoin’s Surge
The cryptocurrency market has witnessed significant gains, with Bitcoin leading the way, nearing the $65,000 level, marking its highest point in a year. This rally can be partly attributed to the Federal Reserve’s decision to lower interest rates, which has injected liquidity into the markets and increased investors’ appetite for high-risk assets, including cryptocurrencies and stocks.
Additionally, political factors are playing a role, as Donald Trump, the leading candidate in the upcoming US presidential election, is seen as a strong supporter of digital currencies. His potential return to the White House in November is fueling further optimism and investment interest in the cryptocurrency market.
.
