The prices of commodities have been, and always will be, a hot topic. Commodity investments help investors diversify their personal portfolio risk and capture additional profit through other markets. But there’s a catch. Access to these opportunities is not easy for small individual investors. The problem? Each commodity contract usually has its own investment requirements, such as initial margin requirements. Furthermore, in most cases, trading futures contracts involves more risks than investing in either stocks or bonds. (These funds make investing in gold, oil or grain an easier prospect. To learn more, see Commodity Funds 101 .)

And that’s not all. There are additional maintenance margin requirements that have to be upheld, along with an understanding of the end-of-day profit and loss calculations. Although usually simple, these calculations can sometimes understate or overstate a market position, creating confusion for traders. So, with the large capital requirement and other complexities of commodities trading, how can an investor capture profitable opportunities in commodities?

The answer is simple – invest through the foreign exchange market. Like other financial markets, the currency or forex market shares directional relationships or correlations with other investment assets. Sometimes the relationships are directly correlated (they move together), other times they are inversely correlated (when one asset rises, the other falls). These relationships can help a retail investor gain access to other markets or help in analyzing global market trends. Now, let’s look at three commodities that share trends with major currencies in the FX market and what makes them special.

Gold and South Africa

Gold has always been a safe haven asset. It helps in times of consumer price inflation and is seen as a physical commodity that stores wealth. The yellow metal also gains popularity in times of market turmoil and confusion. When the market turns lower and fear is rampant in the market, traders and investors seek out gold for its sustained value. A majority of the world’s gold originates from the South African continent. As a country, South Africa ranks among the top-five gold producers with the likes of China, Australia, the U.S. and Russia. So, it’s no surprise that the South African rand maintains a relatively tight, positively-correlated relationship with gold. This is especially true when price momentum builds and a price trend is strong in gold.

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