How to trade the most profitable commodities

Learn how to trade and profit from price fluctuations in gold, silver or oil. Discover the different commodity markets and what drives movements on the price charts.

How to trade the most profitable commodities

Commodities are basic goods that have value and can be exchanged for other products or, of course, for money. Some commodities include precious metals such as gold and silver, but there are several other commodities that you can buy or trade on the global markets.

trade the most profitable commodities

Trading the commodities market

In general, there are thousands of commodities available on the market since these can either be mined, produced or grown. CM trading gives you access to  three different commodity markets:

  • Precious metals (gold, palladium, silver, platinum, copper)
  • Energy (Crude oil, Brent oil, natural gas)
  • Agricultural (sugar, coffee, wheat, corn)

Investing in a commodity is simple enough – you can just outright buy the commodity itself and try to exchange it for money when the prices go up.

However, this isn’t a very efficient or effective method since it can lead to storage issues and of course the hassle of trying to sell large quantities of goods.

Therefore, the easiest way you can profit from the price movements of commodities is by trading commodity CFDs. CFDs (Contracts for Difference) are financial derivatives that mirror the price of the underlying asset and can be bought or sold instantaneously.

You can buy or sell a CFD contract in all of the above-mentioned commodities with CM Trading, which allows you to profit even if the price of the asset is dropping.

Additionally, CM trading offers 100:1 leverage on Gold, Silver which can be used to open positions up to 100 times larger than your current investment can afford, thereby magnifying your profits considerably. Commodities such as coffee, wheat, oil, platinum, palladium and copper are also available at 50:1 leverage.

The most actively traded commodities

Trading commodities is a very popular market, however, some commodities enjoy higher trading volume than others making them more competitive and lucrative for beginner investors.

For example, oil is undoubtedly the largest and most traded commodity. The global demand for oil is ever-rising and therefore the global economy heavily relies on oil suppliers.

Oil prices are quite volatile, which means traders can leverage the rapid price movements for their benefit. As such, buying Crude or Brent oil when the economy is flourishing can prove to be quite profitable while selling oil CFDs in times of crisis can be equally lucrative.

The current coronavirus pandemic has caused the largest collapse in oil prices in the last two decades.  Brent crude is currently trading at $22 per barrel, which marked a 66% drop in the price oil on the global market.

While the prices are going down, you can open a CM Trading account and start selling Crude or Brent oil CFDs to profit from the market downturn in just a few steps.

Gold is another popular asset that is always favourable to trade. Gold is considered a safe-haven for investors due to its high value and immunity to economic downfalls. However, gold was also hit by the coronavirus crisis, but its price rapidly recovered and its steadily making gains.

The yellow metal is currently trading at $1618 per ounce, a 5% jump from the beginning of the year.


Factors that affect commodity prices

All financial assets experience periods of volatility intermittently and commodity prices can also be affected by several factors such as supply surpluses or issues, global demand, socio-political developments, and the price of the U.S dollar on the global stage.

Disruptions in the supply chain of a commodity can dramatically affect its market price. For example, the recent terrorist attacks on two major oil fields in Saudi Arabia resulted in tremendous shortages that effectively led to oil prices reaching record highs.

Since the demand for commodities in developed economies keeps growing due to population growth, any supply shortage will likely lead to an increase in prices. These large price movements are excellent market opportunities which traders can easily take advantage of through online trading.


If you are interested in trading commodities through CM Trading’s award-winning platform, you can open an account and get in touch with your personal trading specialist today.

Register here to get started!

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