As COVID-19 Hits Brazil Again, Commodities Markets See Flight

Brazil is still among the countries struggling to cope with COVID-19 after it has recently reached more than 500k deaths since the pandemic began.

On top of that, reports are showing people struggle to get their second vaccine dose as supplies are rapidly drying up in the country.

June 23^rd marked a record reading in terms of daily new cases since that was the first time more than 100,000 COVID-19 cases had been reported.

The pandemic shows it is not over yet and the pressure on economic activity is translated into pressure on the commodities market.

New cases still elevated in Brazil

The latest count shows close to 30k cases are being reported on a daily basis, which means Brazil is far from keeping the pandemic under control. It has been a major issue since 2020 and now the country ranks 3^rd by total cases and second by the total number of deaths.

A bit of good news can be found in the total active cases, a number that has been falling steadily over the past several weeks. There are less than 1 million active cases in the country, yet worries surrounding the delta variant are keeping optimism subdued for the time being.

Commodities prices retracing

Increased uncertainty with regards to the pandemic is already putting pressure on commodity prices. Copper has been toppling since May, even though the price had posted steady gains for over a year before that.

The same goes for crude oil, which is now seen retracing lower, despite a recent OPEC agreement to increase production on the back of increased demand.

The market is suggesting demand for commodities might not continue to increase at the same pace, as the combination of high inflation and diminished growth prospects puts a temporary cap.

Progress has been made on the vaccination front, yet emerging economies, such as Brazil, in charge of producing a broad range of products at a global scale, still struggle.

What other assets can provide more value?

Considering commodities are not weakening, traders and investors from all around the world might shift their attention to other asset classes that have been underperforming for several months in a row.

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

One of the best ways to take advantage of price movements is via crypto trading platforms like Omplix. This provides the opportunity 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 personalized assistance depending on each customer’s needs.

Capital has been flowing back and forth as uncertainty surrounding the global recovery has still not vanished.

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