Commodities are raw materials or primary agricultural products that can be bought and sold, such as metals, energy resources, agricultural products, and other natural resources. They are typically traded on commodity exchanges and can be categorized into several types:
Includes precious metals like gold, silver, platinum, and industrial metals like copper, aluminum, and zinc.
Comprises commodities such as crude oil, natural gas, heating oil, and gasoline.
Includes crops such as wheat, corn, soybeans, coffee, sugar, cocoa, and livestock like cattle and hogs.
Commodity trading is essential for global economies as commodities are integral to manufacturing, agriculture, and energy production. Prices for commodities are influenced by factors such as supply and demand dynamics, weather conditions, geopolitical events, economic data, and investor sentiment.
Investors and traders participate in commodity markets for various reasons, including portfolio diversification, hedging against inflation, and speculation on price movements. Commodity prices are often volatile, presenting opportunities for profit as well as risks.
Overall, commodities play a crucial role in the global economy and financial markets, impacting industries and consumers worldwide.