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Investing.com – Despite yesterday’s sudden turnaround following the release of US data, global investment banks still appeared to be betting on a safe-haven price explosion to $3,000 after a war-torn year and from inflation.
Interest repricing
According to a Market Watch report, Monday was another death blow for investors who relied on the less hawkish Fed.
Some are now not ruling out a similar change from the central bank – a hike of 0.75% instead of 0.50% – as markets pinned hopes on it after strong data on services, jobs and wages.
The report believes that these violent fluctuations in market trends are in line with the big picture of events in 2022 as a whole, as the relief from the Corona pandemic has been replaced by the crisis of the largest war on European shores in decades, which led to high inflation rates around the world.
Very optimistic
The Market Watch report described Saxo Bank’s latest forecast as outrageous, as it expects the price of the yellow metal to rise by more than $1,200 in 2023.
According to the report note, the Saxo team, led by Chief Investment Officer Sten Jacobsen, has come up with some crazy prophecies over the past decade, namely:
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Prediction of Great Britain’s exit from the European Union in 2015
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-25% drop for S&P 500 from 2007 high in 2008
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-Three times the expected value in 2017
2023
The crux of the outlook for 2023 is that “a return to the pre-pandemic anti-inflationary dynamic is impossible because we have entered a global war economy,” notes Saxo Bank.
“Now all the great powers of the world are rushing to strengthen their national security on all fronts,” says chief investment officer Sten Jacobsen.
“Militaristic sensibilities have been reflected in the profound crisis of the supply chain, energy and even financial insecurity exposed by the experience of the pandemic and the Russian invasion of Ukraine,” adds Jacobsen.
Expectations
Jacobsen expects gold to break above $2,075, then jump $3,000 in light of relentless inflation.
“The Fed’s political and quantitative tightening is leading to a new impasse in US Treasury markets, forcing it to take new underhanded steps to reduce market volatility,” Jacobsen added.
He also said that such measures really amount to new de facto quantitative easing that will come as China ends its zero policy, which leads to higher demand, raw material costs and inflation.
The most important expectations
According to Saxo Bank’s report, Market Watch has listed the most important expectations Saxo Bank has been monitoring during 2023:
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Creation of a new National Price and Income Board in the UK and the US
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Non-US allies are pulling away from Washington and the International Monetary Fund to identify an “international clearing union (ICU) and new reserve fund called Bancor (KEY currency symbol)
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Central banks not aligned with Washington are reducing US reserves
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The dollar is down 25% against a basket of traded currencies
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Japan pegs the US dollar against the Japanese yen at 200
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Forex market intervention fails and inflation rises
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Global authorities are retooling the monetary system, canceling all debts and recapitalizing the banks
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An expansion of price and wage controls
