📌 Complete Guide to Commodities
Understand Commodities, Trading, Risks, and Strategies
🪙 What are Commodities?
Commodities are basic raw materials like Gold, Oil, Wheat, or Cotton. They are standardized, interchangeable worldwide, and form the foundation of the global economy.
🛢️ Types of Commodities
- Metals: Gold, Silver, Copper, Aluminium, Zinc
- Energy: Crude Oil, Natural Gas, Coal
- Agricultural: Wheat, Corn, Soybeans, Cotton, Coffee, Spices
- Livestock: Cattle, Pork (more global focus)
📈 Commodity Trading
Trading commodities happens on specialized exchanges:
- MCX (India): Metals & Energy
- NCDEX (India): Agriculture
- Global: CME, LME, NYMEX
🌍 Importance in Economy
- Hedge against inflation
- Portfolio diversification
- Impact on transport, energy, and manufacturing
- Price stability for producers and farmers
💰 Price Drivers
- Demand & Supply
- Weather Conditions
- Geopolitical Events
- Global Economic Trends
- Currency (USD strength)
📊 Risks in Commodity Trading
- High volatility
- Leverage can magnify losses
- Global dependence on international events
- Government policies & regulations
🧠 Strategies
- Hedging: Protect against volatility
- Speculation: Profit from price movements
- Diversification: Balance with stocks & funds
- Long-Term Holding: Gold, Silver as safe havens
- Seasonal Trading: Agriculture cycles
🏦 How to Start in India
- Open a Commodity Trading Account
- Choose exchange: MCX / NCDEX
- Fund margin money
- Select commodity (Gold, Oil, etc.)
- Place Buy/Sell order
- Track news & global events