Commodity Trading

News Related to Commodity Trading

This page offers you the latest news about commodity trading. Please have a look at our Commodity Trading Guide if you wish to learn more about this financial instrument and how to get started.

Commodity markets are reliant to the movement of the primary economic sector. It deals with soft and hard commodities like coffee and oil. It became a popular trading investment by investors with outnumbering physical trades in the market. Since this financial platform is heavily influenced by economic situations, investors are glued to news portals for information that changes their investment positions.

Factors that influence commodity trading

Participation in commodity trading is a great way to diversify assets beyond securities and stocks. It should be known, however, that the economic market is high in volatility due to the following factors. Unlike financial products, commodity prices are influenced by:

Demand and Supply

It’s the most basic and influential factor in price changes. Demand and supply vary on the seasons they've presented as well as the domestic and global conditions of the economic market. Simple - the higher the demand, then the lower the price and vice versa. However, demand and supply are not equivalent to equity balance.

Government policies

The government keeps tabs with their export and import policy, including tariffs and other relatable taxes imposed. For instance, an increased import duty on oil will show a similar increased in the price of contract. A disagreement between nations can affect commodity trading until it can be set off by both parties.

Fortuitous events

Climate, spillage, or wars can influence commodity trading and prices. These unforeseen events are catastrophic enough to set an imbalance in the global economy which results in an upsetting price of commodities. One reason why commodity trading is a risky investment is that they’re physical products prone to damage by natural forces itself.

Production process

Most commodities are influenced by natural factors when it comes to producing them. Like, say, fruits, although, seasonal can be produced in a controlled environment. However, the quality and price will be different.

Storage and transportation

Commodities have physical forms, thus, storing them is also a huge factor in affecting prices prior to its distribution. Physical goods can be deteriorated during this process and can amp up commodity pricing or lower them. Because of the driving factors behind price volatility of commodities, investors attune to announcements that help them reposition their assets to their favor.

What about commodities in the form of stocks

Many professional investors trade with stocks of companies related to commodities in some way. For example, an investor for commodity oil can hand in with their refineries or tankers. It’s the same with agricultural crops and equipment for them to grow. Gold and bullion can be invested with tanks and smelters as well. Investors in this particular financial asset need to study news portals and relevant researches to ensure commodities trading are active and high. Another commodity trading is through Stock Options, which is a little investment than purchasing stocks directly (have a look at our introduction to stock trading). Risks are controlled and limited, and the price movement is not seen to directly change the stock value.

Commodity Exchange Traded Funds and Notes

These commodity trading and exchange like regular stocks allow investors and traders to participate in influencing commodity price fluctuations even without investing in futures contracts. ETFs make use of indices with futures contracts. However, there are a few cases where investors will safeguard the ETF with actual commodity held in storage. Meanwhile, ETNs are unsecured debt that mirrors the price fluctuation of a commodity and are backed by the issuer.

The need for monitoring commodities

Commodities trading in the market needs monitoring for investors to make intelligent predictions on the movement of their assets placements. Although there are lots of commodity investments for experienced and beginner investors, it’s still vital for interested parties to be knowledgeable of the economic environment. Commodities may have high returns, but they’re also risky investments to undertake because uncertainties that are difficult to predict. Analysis of the market flow can be done by listening and reading to news, participating in forums or discussions, and observing consumer’s trends.

Delivering accurate and trusted news resources delivers high-quality news sources for investors to make analytical predictions and suggestions to their portfolio. We publish the latest commodity market news and developments around the world. Get to know gold trading and market prices with past and present data analyzed by experts and trader insights.