Trading commodities is the process of buying and selling of set quantities of homogeneous, or near-homogeneous assets. The most popular commodities include oil, gas, gold and other precious metals and soft commodities such as coffee, sugar, salt, cocoa, soya etc.
Commodity prices can be affected by such factors, as weather, seasonal availability, natural disasters and other non-market factors usually found in other financial instruments. Clients can trade commodity markets to express their outlook on certain industries or to hedge their trading portfolios.
When trading commodities, you just trade the exchange rate of metals commodity products against currencies such as the dollar or the euro. Through careful analysis, CFD traders predict the potential direction of commodities prices and attempt to capture gains based on price fluctuations.