What is Commodities Trading?
Commodities are essentially bought and sold in large quantities through exchanges in the same way that stocks and shares are traded. There are four large commodity exchanges in the world, including, London Metal Exchange (LME), the Chicago Mercantile Exchange (CME), the New York Mercantile Exchange (NYMEX), and the Intercontinental Exchange (ICE) in Europe.Commodities differ from other goods in that they are interchangeable and standardized, with a centralized commodity exchange setting their values. Trading of commodities previously took place in a physical setting, but today most commodity trades take place online. The impact of demand and supply on these goods’ prices causes them to fluctuate constantly. Commodity trading allows traders to leverage these constant price fluctuations to their advantage and profit from them.
The following sections will provide an overview of the most commonly traded commodities on the financial markets.
Agricultural commodities:
- Coffee — 2.25 billion cups of coffee are consumed worldwide each day, making it one of the world’s favourite beverages. Being the second most traded commodity market after petroleum, it is one of the world’s favourite commodity markets.
- Sugar — Raw sugar and white sugar are both traded as commodities. The majority of us think of sugar as a sweetener, but it also plays an important role in ethanol production. It is predicted that the market will reach USD 89.24 billion in 2024 at a compound annual growth rate of 2.9%.
Energy commodities:
- Crude Oil — Crude oil is a popular commodity to trade because of its volatility. A market like crude oil is highly reactive to political events because of its top producers, such as Saudi Arabia, the United States, Russia and China. Additionally, crude oil is in high demand because it is used as a transportation fuel, as a synthetic textile, a fertilizer, a computer component, and a cosmetic component. WTI and Brent Crude Oil are two of the major oil benchmarks.
- Natural Gas — Natural gas is used in industry, residential and commercial settings, as well as to generate electricity. Gazprom, Royal Dutch Shell, ExxonMobil, PetroChina, and BP are the world’s top natural gas producers.
Metal commodities:
- Gold — Often referred to as a safe haven asset, gold is where investors keep their money during market turmoil. The gold price is often inversely correlated with the US dollar.
- Silver — Silver is also a popular metal commodity for trading. The silver price moves much faster than the gold price, making it attractive for active commodity traders. In contrast, gold has a higher value and is often considered to be more attractive for long-term investors.
- Copper — Used in electrical equipment, engineering, plumbing, and cooking utensils, copper enjoys consistently high demand. Copper is considered a reliable barometer of global economic health, so investing in it is like taking a bullish position on GDP.
Commodities You Can Trade with AximTrade
AximTrade offers a wide array of trading pairs that enable commodity traders to increase their trading efficiency, as well as their profits. The commodity trading pairs offered by AximTrade are as follows.Metals:
| XAUUSD.ax | Gold vs US Dollar/ Spot |
| XAGUSD.ax | Silver vs US Dollar/ Spot |
| XAUEUR.e | Gold vs Euro / Spot |
| XALUSD.ax | Aluminium |
| XCUUSD.ax | Copper |
| XZNUSD.ax | Zinc |
| XNIUSD.ax | Nickel |
| XPBUSD.ax | Lead |
Energies:
| XTIUSD.ax | US Crude Oil |
| XBRUSD.ax | UK Brent Oil |
| XNGUSD.ax | Natural Gas |
How to get started with commodities trading?
Trading commodities is now very simple and straightforward if you choose to do so with AximTrade. Simply open a trading account with AximTrade and take advantage of both the commodity and forex markets with the best trading conditions and lowest capital you can invest.The spread and margin requirements for commodities trading with AximTrade are among the lowest comparing other trading platforms. Traders are also given access to a wide range of tools and trading instruments in order to execute their trades with an informed perspective. As a result, you will be able to generate impressive earnings and reduce the risks associated with commodities trading.
Why Choose AximTrade?
AximTrade is a multi-asset broker and financial service provider with a set of advanced technologies and highly efficient trading platforms to enable traders to expand their abilities and opportunities. AximTrade’s standards of quality are uncompromising when it comes to transparency and integrity and is considered the best investment for beginners to start with. Know more about our exceptional trading conditions by checking the full AximTrade Review.AximTrade stands out as the best broker in terms of its reliability and excellent trading conditions, offering Forex, Stocks, Crypto, Indices, Metals, and Energies, and facilitating in-depth market analysis using various tools accessible through the MT4 platform. Traders can choose from various types of trading accounts based on their capital and trading strategy. Choices include Standard Account, Cent Account, ECN Account and Infinite Leverage Account.
If you’re a novice in forex and finding it difficult to take advantage of market movements, try AximTrade’s leading CopyTrade platform and start trading like a pro from day one. Take advantage of the flexibility to choose from hundreds of successful trading portfolios and choose the best for you to follow.
Source: Commodities Trading: Benefits of trading commodities with AximTrade
