What is your opinion of coffee, gold, or silver?
The global economy consumes massive amounts of commodities daily. A variety of hard and soft commodities is available to UK traders, including produce, livestock, metals, minerals and energy among others. CFD trading of commodities is preferred by UK traders since you don’t have to worry about offloading actual commodities when you are buying or selling them on the markets. AvaTrade offers plenty of contracts for difference(cfd) options for commodity traders. You can trade multiple markets including energies, agricultural, metals, and more.
Start trade Commodities with AvaTrade & enjoy competitive spreads and the benefits of trading with a regulated, award-winning broker!
- Commodities traders get competitive spreads
- Enjoy leverage of when you trade commodities online
- Clients can access customer support 24/5 in multiple languages
- AvaTradeGO makes it easy to trade commodities anywhere at any time
- The MT4 platform at AvaTrade allows you to trade hard or soft commodities.
It is quick and easy to trade commodities online at AvaTrade. Many different types of commodities are available, including soft commodities and hard commodities. We are 100% licensed and regulated to offer real money commodities online trading, including multiple benefits for UK clients.
Understanding the Commodities Market
Before you get started, it’s important to understand exactly what commodities are. In simple terms, a commodity is a good. It is traded on the markets, or used by businesses. Every commodity that is traded on an exchange must meet with certain grades and standards. Since we are dealing with a global supply of commodities, there are bound to be differences between them, but they are standardized in such a way to make them interchangeable, exchangeable, and tradable
Hard Commodities – these are commodities that are mined. Multiple examples abound, including fossil fuels, minerals, precious metals and the like. Classic examples include gold, silver, platinum, diamonds, coal, iron ore, crude oil etc.
Soft Commodities – soft commodities include anything that is grown, rather than mined. There are many examples of soft commodities, including agricultural produce like coffee, corn, sugar, and wheat. Soft commodities are typically produced by farmers and they are extremely sensitive to weather phenomena, climate, and display cyclical price patterns.
Prices of Commodity
Inflationary factors – whenever there is inflation, the price of commodities will change.
Currency factors – there are strong correlations between currencies and commodity prices. It is well-known that the Canadian dollar is closely linked with the price of crude oil, given that Canada is an oil exporting country. Much the same is true with gold and the USD. It is important to monitor connections between currencies and commodities to benefit from trading activity. Most commodities are dollar-denominated, indicating that the USD is the most important currency to watch.
Stocks and inventory factors – commodity prices can be impacted by things like productivity of staff, geopolitical considerations, crop diseases, weather phenomena, fiscal issues such as tax, regulations including trade laws, government subsidies, international agreements etc.
Demand and supply factors – price stability is assured when demand and supply are balanced. If there is an imbalance, prices will move accordingly. Oversupply leads to lower prices, while undersupply leads to higher prices.
Why should you trade Commodities at AvaTrade?
- Portfolio diversification is one of the most important reasons to include commodities as part of your traded assets. You can significantly increase your return on investment by adding commodities to your portfolio. While they don’t pay dividends, they also don’t go bankrupt. Additional advantages of trading commodities include the following:
- You can trade commodities on the go with the AvaTradeGO app• You can trade commodities on the go with the AvaTradeGO app
- It is relatively cheap to start trading commodities online, from as little as
- Hard and Soft commodities are a terrific hedge against inflation. When economies undergo inflation, commodity prices tend to rise.
- When you trade commodities on margin, your profit potential rises significantly. This can be done by trading CFDs at AvaTrade.
- Unlike traditional investments where asset appreciation is required, you can profit off commodity trading whether the price goes up or down (long/short positions).
- Enjoy commodity CFD trading on long or short positions on the go.
Start trading Commodities & enjoy the benefits of trading with a regulated, award-winning broker!