Commodities are commodities extracted from Earth. There are many commodities that are traded in the open markets and through Forex brokers, as well as brokers. There are many examples of commodity products that are; crude oil, coffee, metals, agriculture, wheat, soy, corn, honey and cotton. Usually the goods meet the following criteria; they are tradable, shipped and liquid. The most traded goods are metals, crude oil and coffee. Commodity prices may change as the penny drops. According to several commodity analysts, specific commodity products are thought to be due for correction.
In addition to crude oil and coffee, one of the most traded goods in the world is metals. This group of goods consists of items such as; gold, silver, platinum and copper. Metals are used in all sectors of construction, machinery manufacturing and consumer goods. In addition, many metals are found as components of jewelry. Metal goods are traded on exchanges such as the London Metal Exchange, COMEX & NYMEX.
Commodity prices are usually cyclical. Over the last 15 years, many investors have reaped the benefits and benefits of investing in commodities as a strategy to diversify their portfolios. There are currently over 135 commodity ETFs providing investors and traders with exposure to many commodities such as metals, cereals, butter, coffee and sugar. One of the main factors influencing the instability of goods is the price of these products during economic cycles.
One of the most important questions to be asked by investors and traders is that commodity prices have peaked. In the early 2000s, which some consider to be big investors in the super commodity cycle, they were more than happy to take risks with commodity prices. In the wake of the 2008 financial crisis, commodity prices have had a high return on investors and speculators. There is evidence to suggest that these large increases in commodity prices (according to the World Bank) will not accelerate as before, but should remain stationary by 2020.
One of the most widely traded metals is gold. Like any commodity, gold is subject to the laws of supply and supply. Gold prices in general are far from their highs in 2011, when an ounce of gold was trading at $ 1900. Usually, US dollar and gold prices go hand in hand. In 2011, the US dollar was not as strong as it is today. In 2011, when the US dollar was weaker, the investment in gold was seen as a hedge against inflation.
During the financial crisis, investors and traders believed that gold would continue to rise from the Fed's devaluation of the dollar. Investors and traders who thought gold prices would remain stable as their peaks now feel the pain of investing in metal.
Again, it is important to note that gold prices are subject to supply and demand laws. Demand for gold is low today, pushing the price of metal down. In 2011, investors and speculators believed that gold was a sure thing and demand pushed prices higher.
Although gold prices are not close to what they have been in the last few years, 2016 has surprised some investors and speculators that the metal has surpassed numerous asset classes. Gold ETF prices have exploded in the last few months of 2016. Growth has far exceeded that of 2015.
There is a lot of speculation about gold prices and where they will potentially go in the next few months. There are some who believe that the price of gold will actually fall below $ 350 an ounce. These gold price levels have not been observed since 2003. Although these price levels appear to be completely off the chart, there is reason to believe that when looking at historical gold prices, the current price is close to $ 1,250. If the dollar remains strong and inflation remains in check, the fall in gold prices, along with other precious metals, could be significant. If metal such as gold fell in prices not seen since 2003, this would amount to approximately eighty percent of the collapse of gold prices at its peak in 2011. This type of sale would be catastrophic for many investors and traders who are long gold.
US inflation has been checked and relatively low. In the past, gold and other precious metals were an excellent hedge against inflation. As cost of living rises due to a surge in inflation (measured by the consumer price index), investors, as well as traders, flock to gold. Currently, a stable inflation rate, coupled with the strength of the dollar, keeps gold prices in check.
In conclusion, commodity markets can be very volatile and active traders who want to make money in this market need to keep an eye on commodity prices as well as news and events around the world. Inflation plays a major role in the purchase and sale of precious metals and investors, and traders must also closely monitor the economies of the world to determine the inflation rate in these countries. Today the most popular goods are traded; crude oil, coffee, metals, agriculture, wheat, soy, corn, honey and cotton. Institutions, as well as individual traders and investors trading metals, do so on exchanges such as; Comex, Globex, USAGold, Australian Securities
Stock Exchange, Chinese Gold and Silver Exchange and Shanghai Benchmark. Again, precious metals such as gold, silver, platinum and copper are some of the most actively traded goods in the world. When working with a Forex broker, the Forex trader will be able to view different commodity prices such as copper prices, real-time gold and silver prices and be able to trade in these commodities.