Commodities refer to raw materials that are generally widely used in industry or agriculture, And it is a large-scale buying and selling process rather than at the retail level. Generally, it can be divided into 3 class:

1. energy - Including crude oil, Natural gas, etc
2. Basic raw materials - Including gold, silver, copper, Aluminum, etc
3. agriculture products - Including sugar, Corn, Soybeans, etc

Trading commodities can serve as a safeguard against inflation for investors, Because inflation is detrimental to the trading of general investment products. During inflation, The profits of general investment products such as bonds will relatively decrease, But the relationship between commodities and inflation is generally proportional. Because when the prices of goods and services rise, The value of the goods and services required for their production will also increase. Therefore, if your investment portfolio also includes some commodities, You may be able to reduce the losses caused by inflation as a result.

Supply and demand, It is an important factor affecting bulk commodities. Taking oil as an example, If there is an expected oversupply of oil production and supply, And the demand in the market has not changed significantly, Oil prices will fall. The tense situation in the Middle East usually affects the stability of oil supply, This will cause a shortage of supply in the market, Its price will increase due to the expectation of short-term demand exceeding supply.

Another important factor is inflation, During inflation, Due to currency depreciation, Investors need to use more funds to exchange for commodities, This will also affect the prices of bulk commodities.

If you wish to trade bulk commodities, Gold and crude oil may be your first choice for beginners. Because gold is an important safe haven tool in the market, When political instability or economic recession occurs in various countries, People will worry about currency depreciation, And gold often becomes one of the choices to avoid currency depreciation in hand.

And when there are unexpected events happening internationally, Gold prices are usually volatile commodities, This is different from foreign exchange currency pairs, The price of gold will not be limited to events between the two countries, But it is influenced by global factors, Therefore, it can provide investors with more investment opportunities.

And in terms of crude oil, Its supply and demand are relatively easy for investors to understand the reasons for its fluctuations in international news, And it's like gold, The price fluctuations are influenced by global factors, It can also provide more opportunities for investors.