What are Commodities?
Commodities are essential raw materials used in the production of goods and services worldwide. They can be bought and sold on international markets, as their value is determined by global supply and demand.
They are highly traded assets because they affect key industries such as energy, agriculture and precious metals.
🔹 Simple example: If the price of oil rises, the cost of fuel and transportation also rises.
Commodity Types
Commodities are divided into two broad categories:
1️⃣ 🛢️ Energy Commodities:
✅ Oil (Brent and WTI) - Global fuel and industry base.
✅ Natural Gas - Key to power generation.
✅ Coal - Still used in several economies.
2️⃣ 🌾 Agricultural Commodities:
✅ Wheat and Corn - Basis for food and processed products.
✅ Coffee and Cocoa - In demand worldwide.
✅ Cotton and Sugar - Key to the textile and food industries.
3️⃣ 🏅 Precious and Base Metals:
✅ Gold and Silver - Safe haven assets in times of uncertainty.
✅ Copper and Aluminum - Fundamental in construction and industry.
✅ Platinum and Palladium - Used in technology and automobiles.
Why invest in Commodities?
Portfolio diversification - They protect against inflation and market volatility.
✅ High global demand - They are essential for the world economy.
✅ Protection against economic crises - They act as safe haven assets (especially gold).
✅ 24/7 trading - They are traded on markets such as the NYMEX, CME and LME.
📊 Investment example:
If you had bought gold in 2000, its value would have increased 5-fold over the last 20 years. 🚀
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