Commodity market for beginners [Download ebook]

The commodity market has been attracting the attention of economists, analysts and investors for a long time. Russia's unprecedented attack on Ukraine and the prolonged conflict in eastern Europe have raised concerns not only about the raw material crisis in the Old Continent, but also about the famine in many African countries. In turn, high prices gas i oil they have a negative impact on - already too high - inflation in Europe and the United States. You can read about how to invest in the commodity market and its prospects for the coming months in free XTB report. 

Goods or raw materials they are goods that are used to produce other goods or services. It is a product of extraction (industrial goods) or cultivation (agricultural goods). Basically, partially processed raw materials are called commodities, although in the case of investments, the two terms are used interchangeably. The raw materials are real, not conventional, as in the case of stocks, currencies or even more and more popular cryptocurrencies. This makes commodity trading different from investing in other asset classes and much more interesting.

Commodity market in focus

According to the estimates of the International Trade Center, African countries purchased agricultural goods from Russia worth USD 2020 billion in 4. At the same time, the import of wheat and sunflower oil from Ukraine to African countries reached USD 2,9 billion. The huge shortage of basic agricultural commodities in one of the world's most populous regions will affect not only their prices on the market, but also the lives of hundreds of millions of people. In turn, the deep sanctions imposed on Russia in connection with the attack on the territory of Ukraine increased the prices of hydrocarbons - oil and natural gas - which may not only contribute to a possible resource crisis on the Old Continent, but also to a further increase in inflation. Although most commodity prices have started to correct since the invasion, the commodity market remains in the center of investors' attention. 

Receive a free e-book and find out:

• Why can commodities be an interesting asset?
• What are the ways to invest in raw materials?
• Opportunities and risks related to the commodity market?
• What could happen next in the commodity market?

How to Invest in Commodities

The history of commodity trading basically goes back to the beginnings of trading in society. The original form was barter, that is, a form of "goods for goods" exchange. Around 4000 BC, the first primitive form of money in the form of clay tablets was invented in Sumer and exchanged for commodities and raw materials. However, the real milestone for modern trade was the opening in 1848 of the first commodity exchange - the Chicago Board of Trade (CBOT), which merged with the CME Group in 2007 to create one of the most popular electronic commodity futures exchange and trading markets.

Currently, anyone who has access to the Internet can invest in goods. All you need to do is set up a free online brokerage account at XTB to join the dynamic trends that we observe on the natural gas, cotton or silver charts. The contracts for difference (CFDs) offered by XTB allow investors to take advantage of any investment opportunities, regardless of the direction in which the price changes.

CFDs are complex instruments and involve a high risk of a quick loss of cash due to leverage. 79% of retail investor accounts record monetary losses as a result of trading CFDs with this CFD provider. Think about whether you understand how CFDs work and whether you can afford a high risk of losing money.