Commodities trading is the buying and selling of raw materials or primary agricultural products. There are hard commodities, such as gold or oil, and soft commodities, including livestock and agricultural goods. Today, traders can access commodity price movements through financial markets without taking physical delivery of the underlying asset.

Trading commodities gives you exposure to assets like oil, gas and metals without the need to store or physically own them. Commodities are often viewed as a potential hedge against inflation, as their prices are not always closely correlated with other financial markets. Gold, in particular, has historically been considered a safe-haven asset during periods of economic uncertainty.

To start trading commodities, open and fund an account on a platform that offers commodity CFDs. Choose a commodity and decide whether to buy (go long) or sell (go short) based on your market outlook. Before opening a position, consider volatility, position size and apply risk management tools such as stop-loss orders.

Commodities prices are mainly driven by supply and demand dynamics. Production levels, inventory data, weather conditions and geopolitical events can significantly impact markets, particularly in energy and agriculture. Macroeconomic trends, currency movements and global growth expectations also influence pricing.

Commodities trading involves market risk due to price volatility and sensitivity to global economic and political developments. Sudden shifts in supply, demand or investor sentiment can lead to sharp price movements. When trading leveraged products such as CFDs, both potential gains and losses are amplified, making effective risk management essential.