Oil and copper are some of the goods that increased the most in March 2021. Global Inflation for consumers reached 3.3%, which would encourage savings in crypto assets.
The price of commodities or raw materials continues to grow month by month. This situation sets a pattern in the subsequent Inflation generated in the markets and, ultimately, impacts consumers’ pocket.
According to Trading Economics, crude oil has had an increase of 3.14% in March 2021 (3.8% in the case of Brent) compared to the previous month. In the same period, the increase was 4.9% for gas, and 4.67% for gasoline.
The raw material of the industrial sector is also on the rise. In this sense, steel has shown an increase of 9.2% per month, while copper is worth 2.9% more than in February.
Gold had an increase in its value of 1.83%, while platinum rose reached a higher peak with more than 2.41%. Silver was the only one of the three that decreased in the last month: -0.05%.
However, the year-on-year summary reflects otherwise. The most crucial difference appears in energy, in which the increases are pretty relevant: (30.85% for crude oil —29.4% for Brent—; 6.7% for natural gas and 45.5% for fuel).
Likewise, industrial metals have also reached multiple peaks circling 21.7% in steel and 21.3% for copper. On the other hand, in metals, gold and silver decreased their value (6.64% and 2.26%, respectively), and platinum increased by 13.65%.
Global Inflation is a Consequence
Banks and investors don’t only use the price of commodities as a tool to seek and obtain a better store of value; these prices also influence people’s daily lives in general due to their relationship with the cost of various essential goods and services.
In this sense, the Consumer Price Index (CPI) of the United States reflected an increase of 0.6% in March 2021 compared to February of the same year. Meanwhile, the year-on-year growth was 2.6% but lower than the increase in global Inflation, which reached 3.39%.
According to a CNBC publication, the increase registered in the United States between March 2020 and 2021 (2.6%) is the highest in an annual period since August 2018. Dow Jones had forecast a slight increase lower: 2.5%.
Global Inflation in Dollars is Bringing Uncertainty
Inflationary reports raise concern for many, who are thus seeking new ways to protect their savings from loss of purchasing power, which affects even the strongest currencies, such as the dollar.
Given this situation, the demand for cryptocurrencies could suffer a sudden boost, according to a Bank of America report. To respond to this demand, the central banks of various countries analyze the distribution of central bank digital currencies (CBDC) to stimulate the economy and upgrade the distribution of economic aid in those affected regions.
The distribution of cryptocurrencies could have the opposite effect and contribute to the inflationary process. While none have officially come out yet, China, Sweden, the United States of America, and the Bahamas have plans to do so in the future.
By: Jenson Nuñez
