When trading commodities it is imperative to understand what it is we are buying or selling.
Each commodity will be measured in its own unit.
Platinum is known as high octane gold. Copper is the third most popularly used metal in the world. Yes, there ARE other metals to trade besides gold & silver.
Some of the main reports for you to look out for include the Cotton and Wool outlook, published by the USDA’s Economic Research Service. Also, pay close attention to weather reports, which can impact heavily on supply and as a result prices.
When trading gold and silver, you must be aware of what they are both used for the major producing and exporting nations, as well as the big consumers and importers.
Due to the fact that the oil is formed deep underground, extraction is a very costly process. Prices are nevertheless determined by supply and demand, as well as seasonal and political factors.
A tick is, therefore, the smallest possible price change for any commodity-based instrument and the size of a tick is unique to each instrument in question.
Natural gas and heating oil can both be categorized as distillate energies, or distillates, whereas natural gas is a commodity extracted by drilling for gas deposits often found alongside crude oil reserves.
Trading on commodities is as old as trading and it’s still the best long-term investment available – having consistently beaten inflation for the past 50 years.