Commodities have been traded for thousands of years. In the past, they were traded physically. Today, however, commodity trading takes place on exchanges around the world such as the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME).
commodity prices tend to keep trends for longer periods.
traders will find commodities as an effective means to diversify their portfolio. Also, you don’t purchase commodities physically, you simply speculate on their prices. As a result, you are shielded from unforeseen complications in the market such
Commodities are trading assets grouped under three categories: energy, metal, and agricultural. Instead of physically buying these assets, you can profit by trading CFDs or futures on their prices.
Consumer trends: consumer trends also play a key role in commodity demand. For example, consumer demand for jewelry can boost demand for gold. Similarly, demand for cars can have an impact on the demand for platinum and palladium, as this is used to make catalytic converters, which help to reduce vehicle emissions.
Manufacturing trends: demand can be impacted negatively by commodity substitution. If a particular commodity becomes too expensive, buyers will look for cheaper alternatives. A good example here is copper, which is used in a wide range of industrial applications. As the price of copper has risen, many manufacturers have used aluminum as a substitute.
keys impact commodity supply
Government intervention: governments can play a key role in commodity supply by introducing production constraints.
Geopolitical events: conflicts between countries, terrorist attacks, trade wars, social unrest, and closures of important transport routes
.Weather: play a major role in the supply of agricultural commodities such as sugar, cotton, and cocoa.