Noor Capital | Mohammed Hashad Interview on Dubai TV – October 9, 2023

In an interview on Dubai TV, Mohammed Hashad, Director of Research and Development at Noor Capital and member of the US Association of Technical Analysts, commented on the performance of global markets in light of the current geopolitical developments in the Middle East.

First of all; Hashad commented on oil prices that the markets see as strongly surging, as analysts focus in their reading of developments in oil prices on the geopolitical conditions that the Middle East region is witnessing, and these conditions may even continue for weeks to come as well.

Asked whether markets are facing stronger increases in oil prices; Hashad stressed that oil was able to end a long series of losses, and last week was one of the worst trading weeks for oil, namely its worst week since last March.

Hashad pointed out that the key word that changed the trend of oil prices rising was ‘geopolitical tensions’, and that they were the main driver behind these gains achieved by oil prices. He also pointed out that the gains of crude oil were estimated by over five percent.

Observers can say that political and geopolitical concerns could impact oil supplies in the Middle East in general, considering that the region is the largest exporter of crude oil globally, and there is also the main idea that dominates the markets if these in the Middle East continue; this would expose approximately twenty percent of the world’s oil supplies to a halt if anything prevents the flow of oil supplies through the Strait of Hormuz, and thus markets may witness further surges in the coming periods if clashes continue in the Middle East.

In addition to noticeable rises in oil prices, the markets also see rises at the same time in gold prices, and perhaps this is logical and normal as this is the case whenever a state of anxiety spreads among investors who immediately turn to safe havens, most notably of course gold.

Therefore, according to Hashad, we see rises also in light of the current conditions. Asked whether he expects these rises in gold prices to continue, Hashad replied: “Yes, if these clashes continue, gold is considered a safe haven for investment”.

Hashad said: “Under such circumstances the investor prefers staying away from the riskiest financial instruments and thus resorts to investment instruments with a guaranteed return that are safer, such as gold and bond Treasury yields, and of course, this is very clear in the purchases of central banks and some countries during the past days, including Turkey, Finland, and China”. He indicated that these countries have purchased large quantities of gold, equivalent to thirty-eight percent over the past months, and therefore we may witness further increases around the thousand level. Nine hundred dollars per ounce.

Muhammed Hashad commented on the support that the US dollar is receiving from the surrounding conditions and also from the US NFP data, and about the dollar’s performance, he added: “The jobs data came in a positive and was a surprise to the markets after the US economy added 36000 jobs, that is, double the expectations that were at 170000”, exceeding the readings for July and August; this means that there is a strong labor market and that the American economy is still strong with the continued wave of monetary policy tightening, and this means one of the most important factors that pushed the dollar to rise, as it is also considered one of the safe havens.

Speaking about the performance of the US economy, especially with Christine Lagarde’s recent statements in which she said that the International Monetary Fund lowered its growth expectations for economies in all countries of the world except for the United States of America, Hashad was asked about the most important factors of strength in his opinion in the American economy currently.

He replied: “Retail sales have achieved a significant increase on the service sector front and on the manufacturing front, and the US economy is still performing significantly better than the European economy, it is performing better than the slowdown currently existing in China, and therefore “I believe that the final results of the International Monetary Fund will appear tomorrow”, he added.

Therefore, Hashad believes that the US economy is growing above expectations, and therefore Christine Lagarde excluded the United States from these negative expectations.

On the first day of the new trading week, and regarding the most prominent events that global markets are awaiting during this week, Hashad said: “The most important thing with the launch is the US inflation data, the Consumer Price Index, and the Producer Price Index, in addition to the results of the latest FOMC meeting minutes”, which will provide clues on the future of track of interest rates during the upcoming months.