One Bank’s Outrageous prediction for 2023 as commodities get expensive.

Earlier this month, the annual report from the Danish bank was published, expecting a shift in the global economies into a “war economy,” where national economic interests and independence prevail over globalization.

Although the predictions are not the official opinion of the bank, looking at the impact that would have on the global economy and the political plans due to the decision from the policymaker for the following year.

Gold could surge by $3,000

Along with other outrageous predictions for the next year, Ole Hansen, head of the commodity strategy for Saxo Bank, forecasts the possibility that the spot price of gold could exceed more than $3,000 per ounce next year-that is 67% more than the current price trend of about $1,797 per ounce.

The report attributes the expected increase to three factors: “an increasing war economy mentality,” which makes gold more appealing than foreign reserves; significant investment in new national security priorities; and rising global liquidity as policymakers attempt to avoid debt crises in their respective recessions.

“I would not be surprised to see commodity-driven economies wanting to go to gold because of a lack of better alternatives,” Steen Jakobsen, chief investment officer at Saxo, told CNBC’s “Squawk Box Europe” on December 6.

“I think gold is going to fly,” he further stated.

The global commodities intelligence group CRU says that while economists anticipate a rise in gold prices in 2023, a spike of that size is improbable.

“Our price expectations are much more moderate,” a senior analyst at CRU, Kirill Kirilenko, told CNBC.

“A less hawkish Fed is likely to lead to a weaker USD, which could, in turn, give gold bulls more breathing space and energy to stage a rally next year, lifting prices closer to $1,900 per ounce,” he concluded.

However, Kirilenko emphasized that everything hinges on the Federal Reserve’s actions. Therefore, he added that any indication that the U.S. central bank is becoming more “hawkish” would probably cause gold prices to decline.

Britain is poised to reenter the European Union.

Saxo’s Jakobsen believes that a second Brexit referendum is the “outrageous forecast” that will likely come true in 2019.

“I actually think it’s one of the things that will have a high probability,” he stated to CNBC.

British Prime Minister Rishi Sunak and his Finance Minister Jeremy Hunt might push the
Conservative Party’s popularity to “unprecedented lows,” according to Saxo Market Strategist Jessica Amir, as their “tough fiscal blueprint plunges the U.K. into a devastating recession.”

The bank predicted that this might cause the English and Welsh public, particularly younger people, to reconsider their decision for Brexit and compel Sunak to call a general election.

According to Saxo’s Amir, if the opposition Labour party wins the election, they may pledge to hold a referendum on reversing Brexit on November 1 with the “join” side prevailing.

“Business people are saying the only thing they’ve gained from Brexit is U.K-specific GDPR,” Saxo’s Jakobsen informed CNBC in an interview. “The rest is just increased red tape,” he further stated.

This prognosis “simply doesn’t compute,” said Anand Menon, director of the research tank U.K. in a changing Europe.

I don’t believe there will be a second referendum, and the notion that [Labour leader Keir] Starmer would hold that view is ridiculous, he declared.

Starmer said his party would “make Brexit work” during a business gathering in September.
Menon said that the public’s perception of Brexit has evolved since the referendum, which saw a narrow majority of 52% of voters choose to leave the E.U. in 2016.

“It’s absolutely the case that public opinion seems to be turning,” he concluded.

YouGov’s research from November revealed that only 2% of the 6,174 respondents said Brexit had gone “very well,” while 59% believed it had gone “pretty badly” or “very badly” since the end of 2020.

Ban on meat production.

According to a study by Nature Food, meat production is to blame for 57% of the emissions from the food industry. However, since several nations have committed to achieving net-zero emissions, at least one of them may be able to do it, according to Saxo.

According to Saxo Market Strategist Charu Chanana, one country “trying to front-run others” on its environmental credentials may opt to highly charge meat beginning in 2025 and maybe outright outlaw all domestically produced live animal-sourced meat by the year 2030.

“I wouldn’t be surprised to see schools in Denmark and Sweden banning meat altogether; it’s definitely going that way,” Saxo’s Jakobsen told CNBC. “It sounds crazy for us old people,” he stated further.

The countries with legally obligatory promises to achieve net zero are the United Kingdom, the European Union, Japan, and Canada.

When contacted by CNBC, the U.K.’s Department for Environment, Food, and Rural Agriculture claimed there were “no intentions” to impose a meat tax or outlaw meat production.

A turbulent 2023?

Other “outrageous forecasts” made by Saxo for the coming year include the departure of French President Emmanuel Macron, Japan pegging the yen to the dollar at a rate of 200, and creating a single European Union military.

However, it is advised to approach all of the forecasts with caution. According to Saxo’s Jakobsen, a 5–10% likelihood of each projection coming true was provided to CNBC.

Over the previous ten years, the bank has issued a set of “outrageous forecasts,” some of which have come true or have at least come near.

Saxo projected the U.K. would choose to exit the European Union in 2015 after a United Kingdom Independence Party landslide, it predicted Germany would have a recession in 2019 — which the nation narrowly averted — and it bet that bitcoin would undergo a parabolic surge in 2017.

- Published By Team Timeswire

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