Updated on December 16, 2023Table of Contents
Commodities are tangible, physical assets that are traded on organized markets. They are typically derived from natural sources and are used as inputs in the production of other goods or services. The most common commodities include:
Overall, commodities can be a valuable asset class for investors. However, it is important to understand the risks and potential benefits before investing in commodities.
What is a commodity?
A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are often raw materials or agricultural products, like oil, gold, wheat, or coffee.
What are examples of commodities?
Common examples include metals (gold, silver), energy sources (oil, natural gas), agricultural products (wheat, corn, coffee), and livestock (cattle, pork).
What are the three main types of commodities?
The three main types of commodities are agricultural commodities (like corn, coffee), energy commodities (like oil, natural gas), and metal commodities (like gold, silver).
What is the difference between a commodity and a branded product?
A commodity is a standard, undifferentiated product (like wheat or oil) that can be traded interchangeably. A branded product, however, is differentiated by a company’s branding, quality, or unique features (like Coca-Cola), which makes it distinct and non-interchangeable.
What are the top 5 commodities globally?
Some of the most traded global commodities include crude oil, natural gas, gold, coffee, and wheat, as they are essential resources with high demand across industries.
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