What are Commodities?
Commodities are another category of trading assets just like currencies, shares, cryptos. Essentially, commodities are products that come from the earth. Major commodities include cotton, oil, gas, corn, wheat, oranges, gold, and uranium. In a few words, they are the raw materials needed by the biggest manufacturing companies to run their productive business activity.
From the experience, commodities of the same type can substitute one another, for as long as they are using the same graded product. For example, a company that manufactures chocolates can buy cocoa produced in Ghana or in Cameroon, still producing the same quality of chocolates.
Types of Commodities
Agricultural commodities are those such as coffee, corn, sugar, and wheat – one of the most important food crops in the world.
Energy commodities include crude oil used in transportation activities and production of plastics, natural gas used for electricity generation, and gasoline, which powers light-duty trucks and cars.
Metals come in gold, used in making jewelry, silver, also used for jewelry and having many industrial uses as well, and copper, the most widely used form of electrical wiring.
Trading Crude Oil
Oil price depends on a lot of geopolitical factors and reflects also market participants’ beliefs. Not only individual clients but countries and big companies can all be considered players in the oil market.
To be clearer, airline corporates trade oil to decrease their risk for the fuel price increase, meanwhile individual traders perform in order to make money from price movements. Oil prices are conditioned by the same factors like the exchange rates of currencies, i.e. political developments, financial events, and even weather.
Topinvestus Company advice you to start trading with one of the safest and effective instruments in financial markets. Since today is easy for everyone interested to have access to the global gold market and invest their capital in this asset. Gold is a profitable deposit, and it is more profitable during crises when other investments cannot yield the same result.
The biggest gold markets are located in Zurich, Hong- Kong, London, New York, and Dubai. Few market participants are accepted and very strict requirements are applied. Usually, they are big banks and specialized companies, which are well known and have credit standing. There is possible to have a quite wide number of transactions, no taxes or customs control is applied. The deals are not rigidly regulated: the rules are made by market participants themselves.
Domestic gold markets are the markets of local investors mainly. There are two sorts of domestic gold markets: Open markets which include all markets in Europe, in Milan, Paris, Amsterdam, and Frankfurt-on-Main. The regulated markets are located in 3rd World countries. Here, the operations are made with small bars and coins with national currencies being the means of payment.