How to trade commodities with IG



oil gold wheat livestock commodities are the basic building blocks of the global economy natural resources traded on dedicated exchanges around the world commodities come in two types soft which is typically agricultural like rice or sugar and hard those made up metals or energies like silver and gas the production and consumption of commodities depends on many factors including supply and demand whether economic and political events and the dollar as commodities are normally priced in US currency meaning commodity prices can fluctuate significantly so how do you trade them commodities are bought and sold on a number of exchanges specializing in particular markets for example nymex in new york life in London or the SA chemi in Shanghai they're generally traded as futures contracts which are simply agreements to exchange an asset at an agreed price and date in the future this enables you to trade the contracts themselves without ever having to own the underlying asset but remember commodity prices can be very volatile so it's vital to keep an eye on the potential downside when placing a trade

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