Latest Commodities News & Reports

Gold

Gold Prices Weekly Forecast February 27-March 3

Gold prices ended last week on a strong note, as dollar weakness following the release of the minutes of the January FOMC meeting on...
iron ore

Iron Ore Prices: As Rally Unwinds, Vale Sets Price Target

Market participants were surprised when iron ore’s rally continued to pick up steam in 2017, and even as the commodity surged analysts and iron...
cocoa prices

Cocoa Prices Hover Around 8-1/2 Year Low

Cocoa prices continue to oscillate. On Friday the commodity fell 1% after rebounding in the prior session on short-covering. The commodity is sitting around...
natural gas

Natural Gas Prices Fail to Break Resistance

Natural gas prices extended their recent recovery rally in today’s session, with the contract for April settlement on the New York Mercantile Exchange advancing...
sugar prices

Weak Technicals Add Pressure to Sugar Prices

Weak technicals continue to pressure the sugar market, with the commodity hovering around a seven-week low during Friday's session after selling accelerated as the...
crude oil

Baker Hughes US Oil Rig Count Increases To 602, Annual Gain Exceeds 50%

The latest Baker Hughes North American rig count recorded an increase in total US rigs to 754 in the week ending February 24th from...
Gold and USD

Gold Prices Boosted By Slide In Risk Appetite, Trump Anxiety Back in Focus

US political uncertainty continued to have a significant impact in undermining confidence and gold drew important support from the deterioration in risk appetite on...
silver prices

Silver Prices Up 1.2% and Poised for Weekly Gain as Dollar Corrects Lower

The price of silver rose on Friday, pushing it into positive territory for the week, as the U.S. dollar corrected lower for a third straight...
oil rig

Crude Oil Prices Ease after a Sharp Rally, Can They Break the Trading Range?

After a strong rally in early Thursday’s trading, Crude oil prices reversed the majority of gains, as data showed the seventh consecutive week of...
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.

1,758FansLike
9,753FollowersFollow
1,081FollowersFollow

Commodity Prices

CommodityBidAsk
Live Commodity Prices by FXCM

Upcoming Economic Events

Other News

Japan Currency JPY

USD/JPY Weekly Forecast February 27-March 3

USD/JPY is currently trading with the downside bias. It appears as though a test of first support will take place. The support stands at...
UK Currency -US Dollar GBP/USD

GBP/USD Weekly Forecast February 27-March 3

Sterling advanced at the start of last week, then experienced little movement ahead of the release of the minutes of the January FOMC meeting....
donald trump swearing in

Trumponomics: Trump’s Economic Plan Boosts Business Confidence

While campaigning to become U.S. President, Donald Trump vowed to strengthen the economy by pursuing an America-first agenda. This included a cocktail of policies...
bulls and bears

Top 5 Economic Calendar Events for February 27th-March 4th

Economic data releases will have a major impact during the week across all major markets.The US will release the latest PCE inflation reading with...
Euro

EUR/USD Weekly Forecast February 27-March 3

The euro ended the week lower against the dollar, with EUR/USD closing Friday at 1.0560, a loss of 0.45% over the prior Friday's close....