Meat bans, rising gold prices and the UK’s vote for “Un-Brexit” could be due in 2023, according to Saxo’s Outrageous Predictions.
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Saxo Bank’s “outrageous predictions” for 2023 include a meat production ban, skyrocketing gold prices and Britain’s vote for “Un-Brexit”.
The Bank of Denmark’s annual report, released earlier this month, expects world economies to shift into “war economy” mode, “where sovereign economic gains and self-reliance trump globalization.”
While not representative of the Bank’s official views, the forecasts examined how policymakers’ decisions could affect both the global economy and the political agenda over the next year.
Gold set to hit $3,000
Among the bank’s “outrageous” claims for next year, Ole Hansen, head of commodity strategy at Saxo, said the price of spot gold could surpass $3,000 an ounce in 2023 — around 67% higher than the current price of around $1,797 per ounce.
The report attributes the projected rise to three factors: “a rising war economy mentality” making gold more attractive than foreign exchange reserves, a big investment in new national security priorities, and increasing global liquidity as policymakers try to avoid debt debacles in their respective countries recessions.
“I wouldn’t be surprised to see resource-driven economies looking to switch to gold for lack of better alternatives,” Steen Jakobsen, chief investment officer at Saxo, told CNBC’s Squawk Box Europe on Dec. 6.
“I think gold will fly,” he added.
While analysts expect the price of gold to rise in 2023, a rise of this magnitude is unlikely, according to global commodity intelligence firm CRU.
“Our price expectations are much more moderate,” Kirill Kirilenko, senior analyst at CRU, told CNBC.
“A less hawkish Fed is likely to result in a weaker USD, which in turn could give gold bulls more breathing room and energy to rally next year and take prices closer to $1,900 an ounce,” he said.
However, Kirilenko emphasized that everything depends on the actions of the Federal Reserve. “Any indication of increased Fed ‘hawkishness’ would likely push gold prices lower,” he said.
Britain will vote for a non-Brexit
According to Saxo’s Jakobsen, the “outrageous prediction” most likely to come next year is that there will be another referendum on Brexit.
“I actually think it’s one of those things that’s going to have a high probability,” he told CNBC.
Saxo’s market strategist Jessica Amir said British Prime Minister Rishi Sunak and Finance Minister Jeremy Hunt could push Conservative Party ratings to “unprecedented lows” as their “brutal fiscal program plunges Britain into a crushing recession”.
This, the bank predicted, could prompt the English and Welsh public to reconsider the Brexit vote, with younger voters leading the way, and force Sunak to hold general elections.
Saxo predicts there could be another Brexit referendum for the UK.
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Saxo’s Amir said the opposition Labor Party could then win the election and promise a referendum to reverse Brexit by November 1, with the “rejoining” vote winning.
“Business people say the only thing they have gained from Brexit is the UK-specific GDPR,” Saxo’s Jakobsen told CNBC. “The rest is just increased bureaucracy,” he said.
Anand Menon, director of think tank UK in a changing Europe, said this prediction “just doesn’t calculate”.
“I don’t think there will be another referendum and the idea that [Labour leader Keir] Starmer would take that position for the birds,” he said.
Starmer told a business conference in September his party would “make Brexit work”.
Public sentiment towards Brexit has changed since the referendum, Menon said, after the vote resulted in a slim majority of 52% of voters opting to leave the EU back in 2016.
“It’s absolutely that public opinion seems to be turning,” he said.
Research conducted by YouGov in November found that 59% of 6,174 respondents thought Brexit had gone “fairly badly” or “very badly” since the end of 2020, while just 2% said it had gone “very well”. .
Meat production should be banned
Meat is responsible for 57% of emissions from food production, according to a study published by Nature Food, and with countries around the world making net-zero commitments, Saxo says it’s possible that at least one country could stop meat production entirely.
A nation that “wants to lead others” could decide to heavily tax meat from 2025 and could ban all domestically produced live meat outright by 2030, said Saxo Market Strategist Charu Chanana.
According to a study published by Nature Food, meat is responsible for 57% of emissions from food production.
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“I wouldn’t be surprised if schools in Denmark and Sweden banned meat altogether, it’s definitely going in that direction,” Saxo’s Jakobsen told CNBC. “It sounds crazy to us old folks,” he added.
The United Kingdom, European Union countries, Japan and Canada are among the nations with legally binding net zero pledges.
Britain’s Department for Environment, Food and Rural Agriculture said there were “no plans” to introduce a meat tax or ban meat production when contacted by CNBC.
An eventful 2023?
Saxo’s other “outrageous predictions” for the next year include the resignation of French President Emmanuel Macron, Japan’s peg of the yen to the US dollar at 200 and the formation of a unified European Union military.
However, the predictions should all be treated with caution. Saxo’s Jakobsen told CNBC that each prediction has a 5-10% chance of coming true.
The bank has made a number of “outrageous predictions” every year for the past decade, and some have actually come true — or at least come close.
In 2015, Saxo predicted that Britain would vote to leave the European Union after a United Kingdom Independence Party landslide, it predicted that Germany would enter a recession in 2019 – which the country narrowly avoided – and it bet that Bitcoin would experience a meteoric rally in 2017.