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Oil at $40 oil and bitcoin at $5,000?

The British bank Standard Chartered comes with a forecast of possible surprises

in 2023

Standard Chartered - one of the largest British banks - published a list of possible scenarios that could shock the financial markets in 2023. The presented alternatives of fuerther development are based on current symptoms of the world economy, which are considered by Standard Chartered analysts as underestimated or ignored.

Economic and financial surprises could cause further price fluctuations in stocks, bonds and crypto in 2023. One of the largest British banks with international operations, Standard Chartered, draws attention to this in its report.

The change of U.S. monetary policy

One of the scenarios predicts the response of the US central bank should its current tighening monetary policy cause a severe recession in the first half of 2023. As a result, FED could return to the loosening policy and a significant reduction of interest rates by the end of 2023.

The price of oil drops by 50%

Another item on the list of surprises could be a drop in the price of Brent oil to $40 per barrel, due to the decline in demand during the recession, and a possible peaceful resolution of the conflict in Ukraine. Brent oil is currently trading at $83.17 per barrel, i.e. a drop to $40 would mean a price decrease to less than a half of its current value.

Further fall of bitcoin

Bitcoin could see another price drop in 2023 due to the overall loss of investors' confidence in cryptocurrencies. The price of bitcoin could stop as low as $5,000, which would mean a drop of another 70% from the current value.

Bitcoin price development in 2022 (in USD)

Could gold be the winner?

Gold could benefit from the above described situation, according to Standard Chartered. Price fluctuations in the markets, lack of confidence in risky financial assets, continuing bear market in the stock markets - all this could re-establish gold as a safe haven in turbulent times. According to the British bank, the price of gold could rise by 27% - from the current 1,770 dollars per ounce to the level of 2,250 dollars.

Gold price development in 2022 (in USD)

SOURCE: (6.12.2022)


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