Commodities can be defined as raw materials and goods that are naturally sourced and can be processed for human activity or consumption. They can be divided into three main categories: Energies, Metals, and Agriculture. 

Energies are natural resources that can provide energy, such as Crude Oil and Natural Gas. Metals are mined resources such as Gold, Silver, and Platinum. Agricultural commodities are resources that are grown or reared, such as Soybeans, Corn, Cattle, and Cotton.

At Alchemy Markets, you can trade 10+ Commodity CFDs with institutional spreads and execution, no trading restrictions, tight spreads, and commissions as low as 0¹.

The most traded types of commodities globally can be found across all three commodity categories of Energies, Metals, and Agriculture. They include Brent Crude Oil, WTI (West Texas Intermediate) Crude Oil, Gold, Silver, Steel, Iron, Soybeans, and Corn.

These commodities are popular as some constitute the building blocks of the world’s most in-demand products or are used in large-scale operations. For example, crude oil can be refined into petrol, diesel, petrochemicals, and lubricants, while steel is used in construction and manufacturing. Other commodities, such as Gold, are traded for their value, and Soybean and Corn are popular for agricultural purposes and consumption.

CFD stands for Contract for Difference and is a derivative. Commodity CFDs allow traders to speculate on price movements of commodities without taking ownership of the commodity itself. CFD Commodities traders can take long or short positions when they trade markets with CFDs, meaning they can find opportunities in both bullish and bearish markets. Commodity CFDs are also leveraged products, allowing traders to make the most out of their capital and gain full exposure for a small initial margin deposit.

Commodities can be traded on exchanges via the futures market or they can be traded via CFDs between you and a CFD provider. When you trade Commodity CFDs, you do not take ownership of the underlying commodity. Instead, you speculate on its price movements. For example, if you decide to trade Gold CFDs, you will not need to physically purchase gold in any form, but make predictions on the gold market’s price direction.

At Alchemy Markets, you can trade the price movements of a robust range of commodities with CFDs with institutional liquidity and execution, tight spreads, and commissions as low as 0¹. You can trade the price movements of Oil, Gold, Silver, and more on the most recognised trading platforms in the industry, MetaTrader 4 and MetaTrader 5, which are equipped with superior charting tools and technical indicators. Participate in trading on desktop or on mobile by downloading the MetaTrader commodity trading apps.

Price movements in online commodity trading can be attributed to various factors depending on the underlying commodity. At their core, commodities are priced based on supply and demand. When there is a greater demand for a certain commodity than there is a supply of it, prices will rise. Conversely, if there is a greater supply of a certain commodity than there is a demand for it, prices will fall.

Some factors that can affect the supply and demand of commodities across the board are economic instability, political conflicts, natural disasters, humanitarian crises, seasonality, and production and transportation constraints.

CFD trading on Energies, such as Crude Oil and Natural Gas trading, is popular among traders as avenues for speculation and diversification.

Energy markets are volatile, and oil and gas prices can fluctuate wildly depending on surges and dips in production and consumption, global economic stability, and political conflicts between energy-producing nations and the rest of the world. CFD traders trading in oil and gas markets can easily identify and seize opportunities, and they can also make the most out of their capital with the use of leverage.

Energy CFDs are also traded when traders want to diversify their portfolios. When a trader spreads their capital across industries, asset classes, and financial instruments, they limit their exposure to a single type of risk and minimise the effects of underperforming positions. For example, a trader who invests in healthcare stocks may diversify their portfolio with crude oil trading, as the crude oil market has little correlation with the performance of healthcare stocks. By not putting all their eggs in one basket, they can prevent catastrophic losses if one instrument happens to perform exceedingly negatively.

MetaTrader 4 and MetaTrader 5 are the best Gold trading platforms in the industry and trading on MT5 is easy. At Alchemy Markets, you can trade Gold CFDs with tight spreads and institutional liquidity and execution. Simply log into your funded live account on MT5, find the symbol for Gold paired with the US dollar (XAUUSD) or the Euro (XAUEUR), and add the instrument to your charts from your Marketwatch panel. You can then place long or short positions based on your speculation.