Commodities are materials that are found in and extracted from the natural environment (oil, gas, coal, gold, etc. - over 70 names). Commodity trading is one of the oldest types of trade, as currencies, and stocks appeared much later than raw materials. The price of commodities is formed by the ratio of supply and demand, the more scarce the commodity, the higher the price.

 

Gold

• is considered a safe asset in cases of market uncertainty
• inverse correlation with the US dollar
• is a part of gold and foreign exchange reserves of many countries, so the price depends on the monetary policy of these countries
• 2,756 to 3,307 tons are mined annually, and about 2,000 tons are used in jewelry or medical business. India is the leader in world gold consumption, next are China and the USA. 

 

Silver

• The price moves faster than gold. Interesting for active traders for short and medium-term positions
• The best conductor of electricity and heat, actively used in industry, medicine, and photography, so it is in wide demand 
• The largest producers are Peru and Mexico (production has been going on since 1546)
• Production decreased in 2020, leading to lower supply on the markets.  

 

Crude oil 

• Volatile commodity
• Direct correlation with the US dollar
• Main producers: Saudi Arabia, USA, Russia, China
• Price is very sensitive to geopolitics, world conflicts and political decisions, and sanctions
• Benchmark oil grades are WTI (benchmark for oil production in North America) and Brent Crude Oil (produced in the North Sea, benchmark for Europe and Africa).

 

Natural Gas

• Relate to volatile and high-risk trade
• Price is directly correlated with production volumes. Exploration and development of new wells is a long and expensive process, so the price is very sensitive to supply volumes
• Price is influenced by weather conditions - the colder the climate, the higher the demand for consumption
• There are key producers of natural gas: Gazprom, Royal Dutch Shell, ExxonMobil, PetroChina and BP
• In 1821, the United States began producing gas in the United States.

 

Copper  

• High demand, copper is widely used in electrical engineering, telecommunications, construction, etc.
• Chile and Peru produce about 40% of the world's copper production, so the price depends on the mining/supply situation in these countries.

 

It is worth considering the factors that influence commodity price fluctuations: weather conditions, disease outbreaks, US dollar growth, supply and demand cycles in the world market. The commodity market is speculative and is characterized by sharp price fluctuations. Investors should carefully evaluate market movements and risks.  

 

Our platform provides access to training materials, technical analysis tools, charts and diagrams, a clear interface, and a wide range of trading tools. Everything is designed to make it easy and fast to start trading commodities.