Latest Commodities News & Reports

silver

Silver Prices Range-Bound as Dollar Stabilizes

Silver prices rose slightly on Thursday, although gains were limited as the U.S. dollar stabilized and demand for riskier assets improved.May silver futures edged...
steel prices

US Steel Stocks Remain Supported by Trade Restrictions

Investors cheered the election of Donald Trump as the President of The United States, betting that he would follow through on his campaign promises...
copper tube pipes

Copper Prices Steady After Tumbling in Reaction to the End of Supply Stoppages

Comex copper futures were slightly higher Wednesday, steadying after plunging to multi-day lows in reaction to the news that Freeport McMoRan’s Indonesian unit resumed...
natural gas

Natural Gas Prices Retreat From 5-Week Highs, Large Storage Decline Expected

Natural gas prices were unable to hold five-week highs above $3.10 per mBtu on Tuesday with support on approach to $3.05 in choppy trading...
sugar prices

Sugar Prices Decline to 10-Month Low

Raw sugar futures are having difficulty obtaining lasting support. Since the commodity fell below 18 cents per lb. technical selling pressures have dominated, while...
crude oil storage

EIA Reports Crude Oil Inventories Increase 4.95 million Barrels, WTI Oil Price Tests Support

The latest Energy Information Administration (EIA) inventories data recorded a build of 4.95 million barrels in the week ending March 17th following a 0.24...
fine gold prices bar

Risk Aversion Boosts Gold Prices, US Politics In Focus

The combination of a weaker dollar, lower bond yields and slide in risk appetite has boosted gold prices as markets continue to monitor US...
oil tanker

Crude Oil Prices Slide, EIA Inventories Liable To Hit Fresh Record High

Oil was unable to derive any support from a weaker dollar tone and persistent over-supply concerns pushed Brent to 3-month lows ahead of Wednesday's...
silver

Silver Prices Edge Lower Ahead of Federal Reserve Speakers

Silver prices traded lower on Wednesday, as investors turned their attention to an active second half of the week headlined by multiple speeches from...
crude oil
gold
silver
copper
natural gas
steel

Commodities are raw materials intended for use or consumption. There are three main commodity classifications: Agriculture commodities (often referred to as soft commodities), energy commodities, and metal commodities (referred to as hard commodities).

The most commonly traded commodities are crude oil, gold, silver, and copper.

How Are Commodities Traded?

Commodity markets can include physical delivery, referred to as a spot contract. Most trades, however, are carried out through derivative trading using futures, forwards, CFD’s, and options.

  • Futures contracts are carried out through regulated commodity exchanges. There are a number of international commodity exchanges; the world’s largest futures exchange is the Chicago Mercantile Exchange (CME). Other notable exchanges include the New York Mercantile Exchange, and the London Metal Exchange.

Futures contracts have been the most popular method of trading commodities. The introduction of CFD’s in the late 1990s popularized commodity trading as the usage of leverage was permitted.

  • CFD’s are now offered by most brokers, including brokers that focus primarily on currency trading. While the range of products offered on CFD trading varies from one broker to another, at a minimum, most will offer to trade in crude oil, gold, and silver.
  • Forward contracts introduce the element of time into the equation. The method has been commonly used in agricultural trading, to avoid fluctuations in price ahead of harvesting a crop. The forward contract would allow farmers to set the price on their crops in advance, eliminating risk as a result of price fluctuations. Trading on forward contracts has expanded outside of its original intended use, and contracts are now traded for speculative purposes in a broad range of commodities.

What are Commodities Correlated With?

As the US dollar is the largest traded currency in the world, there is a loose inverse correlation between the value of the dollar and commodity assets.

While the US dollar carries a correlation with the broader commodity market, individual currencies tend to have correlations with individual commodities. In the currency markets, resource-driven economies are referred to as commodity currencies. New Zealand, for example, relies heavily on their dairy trade exports, and therefore fluctuations in dairy prices stand to affect their economy, and as a result, stand to impact their currency. In Australia, copper exports have created a link between their currency and the commodity. Canada produces oil, and their currency carries a strong correlation with oil prices.

Metals have been defined as safe haven assets. During periods of market uncertainty, or what is commonly known as risk aversion, gold prices tend to go up. Risk sentiment shifts in the global financial markets are not the only influence on gold; the precious metal is also bought as a hedge during extended times of low inflation.

Factors That Affect Commodity Markets

In its most general form, supply and demand drive commodity markets. Individual commodity classifications and individual commodities are driven by different influences. Oil, for example, is sensitive to decisions made by the Organization of the Petroleum Exporting Countries (OPEC). Gold prices are influenced by risk sentiment and global inflation levels. The price of gold then influences other commodities under the metals umbrella.

Agricultural commodities are affected by seasonality patterns that can be related to weather conditions, which consequently affect supply. Global events and natural disasters can impact the commodity market, as an example, a hurricane in an agricultural-driven economy would simultaneously increase demand for gold while suppressing prices in agriculture commodities.

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Switzerland - Swiss Currency CHF

USD/CHF On Pace for Test of Late January Low

Although USD/CHF is higher in today's trading, it appears the pair will revisit the low established in late January at 0.9861. At present, the...
Japan Currency JPY

USD/JPY Breaking Down from Support

USD/JPY is weaker in today's session, currently trading at 111.05, down 0.09%. The pair appears to be breaking down from a sideways trading range...
UK Currency -US Dollar GBP/USD

GBP/USD Extends Recent Gain

GBP/USD is higher in today's trading, currently holding near 1.2509, a gain of 0.22% over Wednesday's North American close.Today's gain comes on the...
Euro

ECB Allocates EUR233.5bn In Final TLTRO, Strong Demand For Cheap Funds

The ECB allocated EUR233.5bn in the latest Targeted longer-term refinancing operation (TLTRO) compared with a figure of EUR62.2bn previously. The demand for funds was...
Euro

EUR/USD Meeting Overhead Resistance

EUR/USD is lower in today's trading as the US dollar has steadied ahead of today's US healthcare vote. Congress is expected to vote today...