📝Commodities

What Is Commodities?

Commodities include a wide variety of items, but on the financial investment market, the main commodities traded are bulk commodities. Commodities are homogeneous, tradeable and widely used as basic materials. They are divided into three main categories, namely energy commodities, basic raw materials and agricultural by-products, of which the most familiar ones, such as crude oil, non-ferrous metals, steel, agricultural products, iron ore and coal, are all commodities. In the past few years, there has been a growing global interest in the limited resources available. Their relative investment value has been increasing, and their trading volume has been increasing year by year.

Influence Factors

Supply relationship: is the fundamental factor affecting the price of precious metals. Supply exceeds demand, price falls, demand exceeds supply, price rises. US dollar trend: The US dollar is the denominated currency in the international precious metals market, and precious metals are also an alternative investment vehicle for US dollar assets, thus showing a negative correlation with precious metal prices. Inflation: Precious metals do not lose their value at any time.

Therefore, gold can be used as a proxy for eternal value. The most obvious manifestation of this significance is that in times of inflation, paper money, for example, will depreciate in value due to inflation, while precious metals will not.