Commodities are assets that consist of three categories of products: non-ferrous and precious metals, energy, and agriculture. Traders do not trade physical commodities, but CFDs at their value, so they don’t have to worry about actual product delivery.

 

Agricultural commodities like wheat, cotton, coffee, etc. are called soft foods. The rest, gold, copper, silver, are solid commodities.

Prices on exchanges are formed depending on economic and political events, and the country of origin also affects the cost of goods. Various unforeseen situations, bad weather can lead to an increase in cost. Also, do not forget about the US dollar, as goods are mainly compared with it. But still the main factor in price formation is supply and demand.

Commodity prices persist for a longer period. If you make the analysis and practice correctly, then a trader can start making money on commodities on a regular basis. Also, raw commodities are an excellent solution for diversification, which helps to protect against risks.