A commodity is a product for which there is demand. Commodities are often materials are naturally occurring and are produced by the earth while maintain a generally universal price. Trading commodities is something that has been available to the public for quite some time, however only recently are individual inverters starting to understand the potential on return while trading commodities.
Commodities are often materials are naturally occurring and are produced by the earth while maintain a generally universal price. Trading commodities is something that has been available to the public for quite some time, however only recently are individual inverters starting to understand the potential on return while trading commodities.
We have listed the most commonly traded commodities that most brokers offer and added some general insight regarding these assets:
Oil – The prices of Oil fluctuate depending on market basics including news headlines, supply and demand, as well as fundamental economic data. The price of oil is also heavily affected by historical chart patterns. Due to high vitality in recent years many institutional traders believe that prices have been most affected by speculation rather than these major fundamental factors mentioned above.
Platinum – Platinum is a chemical element represented with the symbol Pt. Platinum is commonly used for jewelry, as well as electrical contacts and laboratory equipment. This is a fundamental element that has multiple uses and users.
Silver – Silver was first used as currency in 700 BCE by the Lydians. Years later silver was refined and turned to coins in its pure form. Many countries still use silver as a basic unit of monetary value and in the modern world silver bullion (silver for trade on the open market) is known by the symbol XAG. In the United Kingdom the British “pound” refers to the value of one pound of sterling silver. In the 1800’s the United Kingdom as well as the United States changed from silver to gold as it was a more sought out commodity.
Gold – Historically gold coins were used as currency; once paper money was introduced in the 1800’s gold became less commonly used as currency. In actuality paper money as we know it today is simply a receipt which is redeemable for gold. Today buying gold is thought to be a natural way of hedging against world inflation and together with the rise of oil prices has shown strong connections to global growth. In September of 2011 Gold prices surpassed 1,800 per ounce, which just 10 years ago gold traded around 400 dollars per ounce.
Coffee – Is a beverage brewed with dark color and acidic flavor. Coffee that is purchased by millions daily is produced naturally primarily in Latin America, Africa, South Asia, and Southeast Asia. Unroasted coffee beans are green. Easily one of the most popularly traded commodities.
Corn – Is part of our world’s biggest industry, Agriculture. Over the past ten years production and growth levels have made cord one of the world’s leading crops. The United States of America easily grow the largest quantities of corn in the world and actually offers it’s agricultural sectors special incentives to grow corn rather than other crops. The area within the United States where corn is most commonly grown is referred to as the “Corn Belt”. The States in this belt include Nebraska, Indiana, Illinois, and Minnesota.
Sugar -Sugar is used widely in mass-produced food products for various reasons. For 100’s of years previously sugar was considered a costly “spice” and was highly valued. Sugar was known as a luxury and kept only in homes of the upper class and royalty.
Wheat – Wheat is the second largest commodities crop in the world, behind only corn. It is often subject to large volatility swings resulting from shortages in 3ed world countries as wellas global droughts and global hoarding.
Cotton -Is widely produced and currently China and India are the world’s largest producers. These countries have an annual production of approximately 24 and 34 million bales respectively. Most of the production made by these countries is used by their textile industries. The United States of America is the world’s largest exporter of raw cotton with yearly sales of 4.9$ billion. Africa is a far second with sales in the range of $2.1 Billion. In total international trade on this commodity is estimated at 12$ billion dollars.