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Interviewed by Dubai TV, Chief Market Strategist at Noor Capital, Mohammed Hashad shed light on the most important developments and market movements, especially the American stock market, which is achieving remarkable gains.
US Stock Market
Regarding the reasons behind the recovery of the American market, Hashad pointed out that the American market ended the last trading of August with a remarkable rally, and American stocks continued to achieve gains at the beginning of weekly trading into September.
According to Hashad, there are strong signals coming from the consumer services sector and the manufacturing sector, it is obvious that the stock market in general has begun to absorb the idea of the looming adjustment of monetary policy in the United States, and that the Federal Reserve is about to cut interest rates during its next meeting in September. Hashad also stressed that the American markets benefited greatly from the rise in Intel shares by nearly 10%, but the main factor that supported the performance of American stocks remains the possibility of reducing interest, especially since inflation in the United States is now heading towards the sustainable target of 2%, and it is noticeable that most of the attention of investors and markets has now shifted from inflation to economic growth.
Oil Performance
Asked about US crude oil prices, which are clearly continuing the decline witnessed by the markets during late August, to continue the decline during the first trading of the new month, and about the reasons for the strong downward trend of oil prices, and the expected levels in the short term, Hashad replied that Nymex crude oil is extending its losses within the worst monthly performance since the beginning of 2024, and the losses in the August month in the oil sector are estimated at approximately 6.25%. He added that it seems that oil investors have begun to absorb the idea of the possibility of increasing oil production by the OPEC+ group starting next October. There are eight member states that are likely to implement an increase in their production by 180 thousand barrels per day, and the voluntary increase plan is likely to continue until the end of 2025, but the main reason behind the increase in the downward trend is the decline in demand levels from the United States and China, as the largest energy consumers in the world. Figures indicate a slowdown in factory activity in China, and consumption levels from the United States have returned to the levels of the Covid-19 pandemic.
Gold Performance
Regarding gold, which has somewhat abandoned the $2,500 per ounce mark today, and whether the journey of recording record numbers for gold prices has reached its final stop, Mohammad Hashad answered that gold prices, which touched their highest level ever at $2,531 per ounce, have moved away from that mark, and this happened in conjunction with the recovery of the US dollar index that surged around 101 again. As for the possibility of gold stopping recording more records, Hashad believes that this depends largely on the US jobs data that the markets are awaiting this week, which is expected to give the markets a clear signal regarding the size and pace of interest rate cuts by The Federal Reserve, therefore, as Hashad believes, gold lacks a clear direction from now until the release of employment data, Friday.
Awaited Weekly Events
Speaking of the most important data that the markets are waiting for this week, which are expected to have a clear impact on the price movements of the most important financial assets or those that should be monitored during this week, especially before the Fed meeting; Hashad explained that the markets are waiting for the interest rate statement by the Bank of Canada and the press conference of the Governor of the Bank of Canada, but the most important of all is the US jobs report and the US job openings data report, in addition to the average wage data and US unemployment rates.
Dollar Performance
Regarding his expectations regarding the performance of the US dollar and its short-term movements, Hashad expected that the dollar will continue to rise during the current trading week, but what determines the rise or fall for the dollar is the US employment data report, which is capable of revealing important signals about the possibility of reducing interest rates by 25 basis points or 50 basis points.
Additional Gold Forecast
Returning to the discussion of gold, which has been subject to a number of pressure factors and whether it is possible to exceed $2,500 per ounce to higher levels, Hashad suggested that gold is waiting for the amount of interest rate cut, whether it will be by 25 basis points or 50 basis points, as the speculations obtained from the FedWatch Tool indicate an increased possibility of a 50-point interest rate cut, and these speculations have increased by 30%.
Hashad added: “But amid the continued political and geopolitical tensions in the Middle East and the possibility of a 25-basis-point interest rate cut, it is not unlikely that gold will exceed the $2,531 mark, exceeding it to the level of $2,560 per ounce.
Cryptocurrencies
Regarding cryptocurrencies that have benefited during the recent period from all the factors witnessed by the markets and important financial assets, and where cryptocurrencies may head, Hashad believes that cryptocurrencies are facing a downward trend amid the recovery of the dollar and he expected this to continue until the end of the current trading week.
