As COVID-19 strikes Brazil again, commodities markets see their flight

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Brazil is still among the countries struggling to deal with COVID-19 after recently reaching more than 500,000 deaths since the start of the pandemic.

On top of that, reports show people are struggling to get their second dose of the vaccine as stocks are quickly drying up in the country.

23 junerd marked a record in terms of new daily cases since it was the first time that more than 100,000 cases of COVID-19 were reported.

The pandemic shows that it is not yet over and the pressure on economic activity is translating into pressure on the commodity market.

New cases still high in Brazil

The latest tally shows nearly 30,000 cases are reported daily, which means Brazil is a long way from bringing the pandemic under control. It has been a major issue since 2020 and now the country ranks 3rd by the total number of cases and then by the total number of deaths.

Good news can be found in the total number of active cases, a number that has steadily declined in recent weeks. There are less than a million active cases in the country, but concerns about the delta variant keep optimism subdued for now.

Commodity prices retreat

Increased uncertainty about the pandemic is already putting pressure on commodity prices. Copper has fallen since May, even though the price had shown consistent gains for more than a year earlier.

The same is true for crude oil, which now appears to be on the decline, despite a recent OPEC deal to increase production due to increased demand.

The market suggests that demand for commodities may not continue to increase at the same rate, as the combination of high inflation and reduced growth prospects impose a temporary ceiling.

Progress has been made on the vaccination front, but emerging economies like Brazil, which are responsible for producing a wide range of products globally, are still struggling.

What other assets can offer more value?

Since commodities are not weakening, traders and investors around the world could turn their attention to other asset classes that have been underperforming for several months in a row.

The cryptocurrency market has erased more than 50% of capitalization since April, which means asset valuations are now much more attractive.

One of the best ways to take advantage of price movements is to use crypto trading platforms like Omplix. This provides the ability to both buy and sell, depending on market conditions, and generate returns using tight spreads and margin trading.

Omplix can teach you the basics of crypto trading and provide you with personalized assistance based on the needs of each client.

Capital is flowing both ways as the uncertainty surrounding the global recovery has still not gone away.

A crypto trading platform like Omplix can provide exposure to digital assets, especially now when commodities are showing signs of weakness. Dozens of different cryptocurrencies are currently covered, to ensure that traders can build a diverse portfolio.


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