Meat bans, soaring gold prices and ‘un-Brexit’? One bank’s ‘outrageous’ predictions for 2023

Saxo Bank’s “outrageous predictions” for 2023 include a ban on meat production, skyrocketing gold prices and Britain voting to “un-Brexit.”

The Danish bank’s annual report, published earlier this month, expects global economies to shift into “war economy” mode, “where sovereign economic gains and self-reliance trump globalisation.”

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The forecasts, while not representative of the bank’s official views, looked at how decisions from policymakers next year could impact both the global economy and the political agenda.

Gold to hit $3,000

Among the bank’s “outrageous” calls for next year, Saxo Head of Commodity Strategy Ole Hansen predicted the price of spot gold could exceed $3,000 per ounce in 2023 – around 67% higher than its current price of about $1,797 per ounce.

The report puts its forecasted surge down to three factors: “an increasing war economy mentality” that makes gold more appealing than foreign reserves, a big investment in new national security priorities, and increasing global liquidity as policymakers try to avoid debt debacles 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 Dec. 6.

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

While analysts are expecting an increase in the price of gold in 2023, a surge of that magnitude is unlikely, according to global commodities intelligence company CRU.

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

Kirilenko highlighted, however, that it’s all dependent on moves by the Federal Reserve. “Any hint of increasing ‘hawkishness’ from the US central bank would likely pressure gold prices lower,” he said.

Britain will vote to un-Brexit

The “outrageous prediction” most likely to occur next year, according to Saxo’s Jakobsen, is for there to be another referendum on Brexit.

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

Saxo Market Strategist Jessica Amir said British Prime Minister Rishi Sunak and his Finance Minister Jeremy Hunt may take Conservative Party ratings to “unheard-of lows” as their “brutal fiscal programme throws the UK into a crushing recession.” 

This, the bank forecasted, could prompt the English and Welsh public to rethink the Brexit vote, with younger voters leading the way, and force Sunak to call a general election.

Saxo’s Amir said the opposition Labour party may then win the election and promise a referendum to reverse Brexit for Nov. 1, with the “re-join” vote winning.

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

Anand Menon, director of the think tank UK in a changing Europe, said this prediction “just doesn’t compute.”

“I don’t think there will be another referendum and the idea that [Labour leader Keir] Starmer would adopt that position is for the birds,” he said.

Starmer told a business conference in September that his party would “make Brexit work.”

Public sentiment toward 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 the case that public opinion seems to be turning,” he said. 

Research carried out by YouGov in November showed 59% of the 6,174 people surveyed thought Brexit had gone “fairly badly” or “very badly” since the end of 2020, while only 2% said it had gone “very well.”

Meat production to be banned

Meat is responsible for 57% of emissions from food production, according to research published by Nature Food, and with countries across the world having made net-zero commitments, Saxo says it is possible at least one country could cut out meat production entirely.

One nation “looking to front-run others” on its climate credentials may decide to heavily tax meat from 2025 and could ban all domestically produced live animal-sourced meat entirely by 2030, Saxo Market Strategist Charu Chanana said.

“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 added.

The U.K., countries in the European Union, Japan and Canada are among the nations with legally binding net-zero pledges.

The U.K’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?

Some of the other “outrageous predictions” for next year from Saxo include the resignation of French President Emmanuel Macron, Japan pegging the yen to the U.S. dollar at a rate of 200 and the formation of a united European Union military.

The predictions should all be taken with a pinch of salt, however. Saxo’s Jakobsen told CNBC that there was a 5-10% chance of each forecast coming true.

The bank has made a set of “outrageous predictions” each year for the last decade and some have actually come true — or at least come close.

In 2015, Saxo forecasted that the U.K. would vote to leave the European Union following a United Kingdom Independence Party landslide, it predicted Germany would enter a recession in 2019 – which the country narrowly avoided – and it wagered that bitcoin would experience a meteoric rally in 2017.