Commodities were highly sought after during the lockdown period. Will they soon be overestimated? After nearly a year and a half of turbulent financial markets,

Analysts predict that there will be gradual inflation by the end of this year, and once the coronavirus crisis subsides, low interest rates will end.

Metals and minerals, including iron and agricultural products such as wheat, corn, and soybeans, are closely monitored by analysts.

As pointed out by French radio station Inter Milan, the recent price increase was "partially overshadowed by the 2008 financial crisis". However, in 2007, Chinese demand had led to a significant price increase until 2013.

Limited supply and growing demand

If concerns about inflation increase, demand will also increase. With the growth of the world population and the economic recovery of the coronavirus vaccine, countries around the world (first and foremost China) have expressed strong demand for commodities.

Demand is exploding, supply is not following, "pointed out Philippe Chalmin, a professor at the University of Paris IX, who is the director of the annual report on the commodity Bible" Cyclops ". We didn't expect to recover so quickly, "he explained.

Gold may benefit from inflation

For gold bar holders, the good news is that the world's most valuable commodity should benefit from the coronavirus crisis.

The French magazine Capital reported that it was difficult for gold at the beginning of this year, due to changes in macroeconomic prospects. But concerns about inflation have restored the confidence of depositors.

In fact, the price of gold corrected by 10% in the first quarter of 2021, indicating that it remains a safe bet in an uncertain global period.

In addition, as the Federal Reserve confirms that its interest rates will remain low for a long time, if inflation surprises the market and quickly escalates, gold should experience a strong surge.

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Will political turmoil confuse the market?

But for some agricultural experts, besides the soaring prices of agricultural products, another possible consequence is likely to be the return of political conflicts, especially the new Arab Spring.

As food prices rise, overcoming the pandemic has proven to be a real challenge, "David Michael Lincke, portfolio management director at Picard Angst, told All News.

He said that the FAO index increased by 30% annually last month. With the pandemic and the surge in long-term consumer goods, global demand for soybeans, corn, and wheat has exploded.

Therefore, we are recovering to levels similar to those observed from 2010 to 2011, which is a precursor to the Arab Spring protests. He added that he also mentioned that rice prices have decreased, which may delay the turmoil in the Arab world.

The above content is considered market commentary information and should not be considered as independent investment research or investment advice.