How to start investing in Commodity markets?

What are Commodities?

Commodities are usually naturally occurring or farmed material that can be bought and sold or traded.

Since goods of the same type and quality class do not differ that much between the various producers, they are interchangeable and have a similar or the same price.

Raw materials are divided into 4 categories: agriculture, energy, livestock, and metal.

Some commodities have intrinsic value because they are rare or difficult to mine (or both), including precious metals such as gold, platinum, and silver.

Example of some different raw materials by category:

Agricultural:

Sugar, honey, coffee beans, corn, wheat, maple syrup, etc.

Energy:

Fuel products such as oil and gas.

Metal:

Gold, platinum, copper, silver.

Livestock:

Pork bellies, live cattle, and other meat products.

With LMFX, an online Forex and CFD broker, you can invest in various types of commodities through their online trading platforms.

Invest in Commodities with LMFX

Differences of Hard and Soft Commodities

Two more terms you might come across while trading commodities are the terms hard and soft commodities.

Hard raw materials mainly include raw materials that have been mined (i.e .: gasoline, gold, oil).

The soft raw materials are animal or agricultural products (e.g. live cattle, wheat, coffee beans).

There are a variety of different factors that can affect the price of a commodity.

From weather and war to changes in the US dollar, anything can affect prices.

One of the most influential, if not the most influential factors, is when the supply and demand of a particular factor change.

For example, gold is currently an asset with a high price.

This is due to the demand for gold and the difficulty of extracting it at the moment, along with the scarcity of the metal.

If we were to live in a world where gold rains down from the sky, the price of this commodity would be drastically lower because the supply would be very high.

LMFX allows you to speculate on the prices of commodities with the help of CFDs and enables traders to use derivatives to participate in trading in the futures markets without owning the actual asset.

See which commodity CFDs you want to trade with.

Start trading Commodities with LMFX

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For the list of LMFX’s all bonus promotions and trading contests, visit the page here.