Commodities that Move the Markets 5.00 / 5 (100.00%) 1 vote

Dozens of commodities are traded freely in various commodity exchanges around the world every single day. They range from metals and agricultural commodities to raw materials and fossil fuels. It is important to note that some of these commodities are more popular than others. The following is a list of commodities that move the markets.

Commodities that Move the Markets

The discovery of oil is one of the factors that drove the world into the industrial revolution. Oil and its derivatives are used to power the global economy. From locomotives and power generation to lighting and heating systems, oil is used in many areas, most of which affect the average person directly. Crude oil is priced per barrel in international/US dollars. Oil producers and consumers normally use futures and options to protect themselves against market volatility that may lead to losses. The daily turnover of crude oil is much more than the turnover of most commodities combined. Major oil producers in the world include; Middle East countries, Russia and the United States.

Coffee is another commodity that moves the market. The daily trading volume of coffee is surpassed only by crude oil. There are many types of caffeinated beverages that can be made from coffee. Major coffee producing countries include Ethiopia and Brazil, but there are several others. Factors affecting coffee prices include; climatic conditions, which may affect prices, geopolitical factors, political instability, diseases and natural calamities among others.

This is the third most traded commodity in the world based on daily turnover. Natural gas is used for heating homes and office buildings. The importance of natural gas is fully appreciated during winter when heating systems work over-time to maintain room temperatures at the desired levels. Natural gas is an economical heating fuel that is very popular in countries that experience extremely cold winter months.

Prominent investors usually buy and hold gold as a way of hedging their investments against inflation. In India, and several other Asian countries, gold is used to make jewelry and decorative pieces for religious purposes as well as for aesthetics. Gold is also a good conductor of electricity with a low melting point, so it is used to make electronics. China, Brazil, Russia and India have also been increasing their gold reserves to stabilize their local currency and shield their economies from the depreciation of the dollar. These are just some of the reasons why the daily trading volume of gold comes fourth in this list.

The fifth commodity in the list of commodities that move the markets is Brent Oil, which trades independently from crude oil. This commodity is a popular source of energy in Europe. The commodity should never be confused with crude oil because their prices are very different.