A raw material or primary agricultural product traded on global markets - including gold, silver, oil, and agricultural goods - often accessible as a CFD through forex brokers.
Commodities are divided into hard commodities (mined or extracted - gold, silver, platinum, crude oil, natural gas) and soft commodities (agricultural - wheat, corn, coffee, cotton, cocoa). They trade on specialised exchanges such as the COMEX (metals), NYMEX (energy), and CME (agricultural), but retail traders most commonly access them through CFDs offered alongside currency pairs by multi-asset forex brokers.
Gold (XAU/USD) is the most traded commodity in the forex space and occupies a special role as a safe-haven asset. When equity markets fall, geopolitical tensions rise, or real interest rates decline, demand for gold tends to increase as investors seek a store of value outside the financial system. Gold's relationship with the US dollar is generally inverse: a weaker dollar makes gold cheaper in other currencies, stimulating demand.
Oil (WTI and Brent crude) is the most economically significant energy commodity, affecting the currencies of major producers (CAD, NOK, RUB) and consumers alike. Trading oil CFDs requires an understanding of OPEC production decisions, US inventory data (published weekly by the EIA), and geopolitical developments in the Middle East.
For multi-asset traders, commodities offer diversification and the ability to express macroeconomic views without entering currency or equity markets directly. Correlation risk should be monitored: a portfolio long AUD/USD and long gold faces double exposure to a common risk factor (risk sentiment), since both tend to weaken during periods of global risk-off.
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