This page covers the major commodities that are most attractive to traders worldwide: gold, silver, crude oil and copper. Keep reading to view live commodity prices, commodity market news and to learn about fundamental factors that can impact commodities prices.
WHAT ARE COMMODITIES?
Commodities are raw materials or agricultural products that can
be bought and sold, with examples being gold, Natural Gas and
wheat. From Copper to corn, coal to crude oil, commodities are
central to life – and the lives of billions of people around the
world are affected by their price fluctuations.
There are two ways to trade commodities – buying and selling via exchanges, or trading them using derivatives such as binary options, CFDs and spread bets (where permitted). The most liquid commodities markets in the US include crude oil, Natural Gas, and RBOB gasoline, as well as soft commodities such as sugar and wheat. When it comes to a global outlook, steel, aluminum and iron are some of the most traded commodities by volume.
WHAT ARE THE MOST TRADED COMMODITIES WORLDWIDE?
By trading volume, the top commodities include gold, silver, US Crude Oil, Brent Crude, copper, and Natural Gas. Products such as coffee, wheat and sugar are also featured on the list of most traded commodities. Here are some of the major ones to consider:
For thousands of years, gold has been a highly valued metal. Rising gold prices may signal political upheaval or uncertainty, due to investors turning to the precious metal as a safe-haven asset when other financial instruments are struggling.
A precious metal with applications in silverware, electronics and jewelry, the price of silver, like all raw materials, is affected by supply and demand balances. Traders may find that silver represents a popular hedge against inflation due to its inverse relationship with the US Dollar, and its high liquidity means silver is a very tradeable commodity.
Crude oil, a naturally occurring fossil fuel formed from ancient organic matter, is of interest particularly to swing and day traders, who seek to take advantage of quick market fluctuations. Crude oil is refined into petroleum products such as gasoline, diesel, solvents and kerosene, which in turn have applications ranging from jet fuel to heating oil for boilers and furnaces.
With utilities ranging from fertilizer to electric wiring, Copper is one of the most widely used metals. It is also widely available, meaning that its value is linked to its industrial applications rather than its supply. The price of copper can be linked to economic health, so traders often take a position based on their view of world growth and GDP.
Natural Gas, like crude oil, is a fossil fuel formed over millions of years from the remains of plants and animals. Traders are attracted to Natural Gas due to factors including growth potential and demand for clean energy.
Coffee is classified as part of the soft commodities group including the likes of cocoa, sugar and orange juice. When it comes to trading, coffee is one of the most volatile commodities because its supply is dependent on agriculture in developing and emerging economies, while demand is highest in Western markets.
WHAT IS COMMODITY TRADING?
Commodity trading can mean two things – buying and selling
commodities via exchanges, or trading them via derivatives
Some commodities are more tradeable than others. For example, markets such as orange juice, oats and feeder cattle are less liquidity – such markets often prohibit speculators from entering or exiting a trade at the point they would like to. An example of a more tradeable commodity is Natural Gas, with crude oil and corn also considered liquid markets.
When trading commodities, speculators should consider factors such as the level of volatility associated with the trade, the aforementioned liquidity of the market, and other factors that influence price movements, listed below.