Commodities

About Commodities

Commodities are natural resources or agricultural goods that are sold and traded, with gold, natural gas and wheat as examples. Raw materials and agricultural products  – from gold to cotton, coal to crude oil – are fundamental to life, and the changes in prices affect the lives of people around the globe. 

Traders can buy or sell commodities via exchanges or by using derivates such as CFDs, binary options, and spreading bets (where allowed).

What Are the Most Traded Commodities Worldwide ?

The top commodities by trading volume include gold, silver, Brent crude, US crude oil, natural gas, and copper. The list of most traded commodities also includes products such as coffee, wheat, and sugar. The major ones to consider are gold, silver, crude oil, copper, natural gas, and coffee.

Gold has been a widely regarded commodity for thousands of years. Rising gold prices tend to be signs of some political crises or instability, consequently resulting in investors converting their wealth to the precious metal as a means to keep their assets safe when other financial instruments are unstable.

Live Markets and Data Commodities

Traders should consider a variety of factors when negotiating the commodities market, such as: 

  • Macroeconomic performance
  • Supply and demand
  • Politics
  • The behaviour of other traders in the market

A lower supply of a commodity usually indicates that the commodity’s price will rise, and a higher supply conversely means that the price will likely go fall.The variables that often influence supply include:

  • Seasonality: for example, for agricultural products
  • Shifts in costs of productions: for example, as a result of improved processes, better technological input or operational changes
  • Changes in industry competition: for example, if new commodity producers or refiners enter or any current ones exit the market 

While oversupply (supply higher than demand) may make prices fall, if demand exceeds supply can lead to a shortage which will invariably cause prices to rise. The rapid fluctuations that typically follows mean that commodity traders need to constantly keep abreast with conditions of supply and demand.

Crude Oil

Copper

Gold

Heating Oil

Natural Gas

Silver

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