Several goods or products are termed as commodities and you have some prominent commodities in the energy, food, and metals. Depending on various commodities, you can trade with them. Innumerable individual investors and organizations have traded with these natural resources.
For investors of various classes, it is an attractive option to trade in commodities. It helps them in developing their investment portfolio under a balanced structure.
A Fair Comparison of the 5 Best Commodities
1. Crude Oil
When you consider trading with commodities, the first trading prospect is ushered in by Crude Oil. The content of hydrocarbon and organic materials make it a resourceful combination of fossil fuel and unrefined petroleum.
Diesel and gasoline are amongst the high-on-demand petrochemicals that are derived from refined crude oil. Fossil fuels that are not renewable mostly constitute crude oils. Once you use it, you won’t be able to replace it.
2. Aluminum
The use of aluminum across various industries owes much to its lightweight. Huge demand for aluminum is perceived across industries like electronics, construction, and automobiles. The versatility of the metal turns it worthy of use across a host of industries.
China has been one of the largest developers and users of Bauxite, which is processed to create aluminum. Industries like construction and transportation would leave a far-reaching impact on the pricing of aluminum. Likewise, the electricity and oil prices would even influence the cost of processing aluminum. High fluctuation of prices makes aluminum a commodity to trade-in.
3. Natural Gas
A plethora of industries has been using Natural Gas for the past few decades. The fact that the oil prices are less as compared to the natural gases increases the demand of the latter in the industrial market. Several national governments have aptly used this for driving their power industry and turned it into a lucrative option for commodity traders.
The oil prices in continents like Asia are substantially linked to the pricing of natural gases. Various factors like that of the levels of storage, growth of the economy, and exports and imports tend to drive the pricing of natural gases. All things summed up, you can easily take it for commodity trading.
4. Copper
Among all processing industries like that of equipment, utensils, and electrical wiring, Copper has been a prominent metal input. Most industries rely on it for conducting electricity and heat owing to its soft nature. The construction industry witnesses a steep rise and fall of supply and demand owing to the fluctuation of copper prices.
It has become one of the most popular trading commodities with time due to the versatility of its properties. If the global industrial growth is speculated by one commodity, it is copper.
5. Gold
The global financial world counts on gold as it is one of the most valuable and ancient commodities. Alongside dentistry and medicine, gold finds a dominant place in the jewelry industry. India has been a major gold consumer whereas Canada, Australia, and China are amongst its leading producers. Trading in gold has been much safer despite frequent fluctuations in its prices.
The Bottom Line:
Traders can check out various ways of investment in commodities, the most popular method being the futuristic commodity contracts.
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