Commodity Market


Sterling struggles to keep afloat; Gold tumbles
Sterling struggles to keep afloat; Gold tumbles

This is certainly shaping up to be a painful trading week for the British Pound, as fears mount over the lack of progress in Brexit talks. The lingering disappointment from Prime Min...

Gold under pressure, Sterling struggles for direction
Gold under pressure, Sterling struggles for direction

Gold collapsed like a house of cards during Monday’s trading session, with prices dipping below $1275 thanks to a strengthening US Dollar. The violent price action witnessed in...

Gold slips as Dollar firms, USDJPY under pressure
Gold slips as Dollar firms, USDJPY under pressure

Gold concluded last week with style, as prices punched to monthly high above $1295 amid a vulnerable US Dollar. Lingering uncertainty over US tax reforms has bruised the Greenback, w...

Sterling, WTI, and Gold in focus
Sterling, WTI, and Gold in focus

Sterling modestly appreciated on Thursday morning, after U.K retail sales rose by 0.3% MoM in October – a figure above market expectations. However, retail sales declined by -0...

Pound pounded by political uncertainty, Gold steady
Pound pounded by political uncertainty, Gold steady

Sterling was the talk of the town across currency markets for all the wrong reasons during Monday’s trading session, thanks to mounting political uncertainty in the United King...

Is the oil rally built on weak foundations?
Is the oil rally built on weak foundations?

Crude oil remained in the limelight on Wednesday, as it stabilized around $57 on the back of escalating tensions in the Middle East. Early trading prices initially declined, due to C...

Markets poised for Nonfarm Payroll
Markets poised for Nonfarm Payroll

The build up has begun for tomorrows NFP announcement and the market is betting big time on a strong result of 313K; this is a very large expectation, but it makes a lot of sens...

Fed in focus, Bitcoin unstoppable?
Fed in focus, Bitcoin unstoppable?

Sterling received another opportunity to shine on Wednesday, after stronger-than-expected data from Britain’s manufacturing sector reinforced market expectations of the BoE rai...

Euro continues to tumble, US GDP in focus
Euro continues to tumble, US GDP in focus

It has been another interesting week for global markets, as investors continued to wrestle with the Catalonia crisis, bumpy Brexit negotiations, and uncertainty around who will becom...

Will UK GDP breathe life into the Pound?
Will UK GDP breathe life into the Pound?

Sterling tumbled against the Dollar on Tuesday, after cautious comments from Bank of England Deputy Governor, Jon Cunliffe, rattled market expectations of an interest rate hike next ...

Euro Can’t Catch a Break, Gold Sinks
Euro Can’t Catch a Break, Gold Sinks

The vulnerable Euro tumbled into the trading week under renewed selling pressure, thanks to brewing political chaos in Catalonia. Spain’s government invoked Article 155 of the ...

Dollar elevated by Trump tax hopes while Gold dips
Dollar elevated by Trump tax hopes while Gold dips

Global equity bulls were missing in action on Thursday, after weaker corporate earnings, soft economic data from China and heightened political drama in Spain encouraged investors to...

Gold loses shine on USD strength
Gold loses shine on USD strength

The US economy has been a little lacklustre as of late, yet the stock market continues to climb higher and employment figures continue to improve. If you asked FOMC member Harker tho...

Euro pressured by political jitters
Euro pressured by political jitters

The Euro found itself vulnerable to losses on Monday morning, thanks to heightened political drama in Spain. Jitters over the Catalan developments were felt across the board, after P...

Investors exhale as Catalan fears ease
Investors exhale as Catalan fears ease

A strong sense of relief was felt across financial markets on Tuesday evening, after Catalan leaders signed a “symbolic” declaration of independence but immediately suspe...

Gold supported by geopolitics, Lira plummets
Gold supported by geopolitics, Lira plummets

Gold shone brightly on Monday as a renewed focus on geopolitical risks stoked demand for safe-haven assets. Fresh concerns over North Korea’s nuclear program has accelerated th...

Gold struggles to shine as Dollar firms
Gold struggles to shine as Dollar firms

Gold struggled to hold onto its shine on Tuesday, as the risk-on mood encouraged investors to seek riskier assets such as equities. The yellow metal dipped to a seven week low to bel...

Sterling stumbles into Q4, Gold dims
Sterling stumbles into Q4, Gold dims

Sterling got off to a rough start during Monday’s trading session, after weaker than expected data from Britain’s manufacturing sector, suggested that the economy could b...

Greenback higher ahead of Trump’s tax speech
Greenback higher ahead of Trump’s tax speech

The Dollar made its presence known across the currency markets on Tuesday, after hawkish comments from Federal Reserve Chairwoman Janet Yellen, bolstered expectations for another US ...

Dollar flexes ahead of Yellen’s speech
Dollar flexes ahead of Yellen’s speech

King Dollar flexed its muscles against a basket of major currencies during Tuesday’s trading session, as investors positioned ahead of Janet Yellen’s anticipated speech l...


The influence of commodity analysis on Forex trade

How investor can realize a profit on the raw materials market, despite high capital requirements and other difficulties when dealing with commodities? The answer is simple - to make investments via the foreign exchange market. Like other financial markets, the Forex market has a direct communication to other types of investment assets. This communication could be the direct one (when both assets enhance), or reverse (when one assets grows in price, the other falls). Such relationships help investors to obtain admittance to other markets, and are of great help when analyzing trends on the world market.

Types of Basic Commodities

The basic commodities on the raw materials market are the class of assets that includes itself raw materials and resources supplied in an ordinary way and available for an exchange. These examples include:   

  • Metals, such as iron ore, aluminum, silver or gold
  • Foodstuffs, such as wheat, rice, sugar, salt, coffee beans and soya beans
  • Energy commodities, such as oil, coal, natural gas and electricity.

On the actual commodity market the bulk of transactions go to trade futures – the contracts, time of delivery of which occurs in a certain period in the future. The benefit of the raw materials market participants consists of the exchange gain between buying price and futures contract selling. This feature offers promising opportunities for income acquisition, making the commodity market instruments attractive to private traders. Commodity prices on the raw materials market are usually specified in U.S. dollars. If the U.S. dollar is not the currency of your trading account, you should be aware that exchange rates fluctuations will affect your results.

The basic commodities could be traded with many brokers by the instrumentality of contracts for difference (CFD). 

Commodity Market and the Exchange Rates

The economics of many countries are heavily dependent on basic commodities exports, for example, Australia, Brazil and Canada. Value of currency in these countries is often influenced by commodity prices.

For example, Australia is an important producer of gold. If the price of the gold increases, appears the need for more Australian dollars amount in order to purchase it, and thus, the price of the Australian dollar will increase.

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