Commodities refer to raw materials or primary agricultural products that can be bought and sold. They are generally uniform in quality and are interchangeable with other goods of the same type. Commodities can be categorized into several types:

  1. Agricultural: These include products like wheat, corn, soybeans, coffee, sugar, and livestock such as cattle. Agricultural commodities are affected by factors like weather, crop yield, and demand.
  2. Metals: Metals like gold, silver, copper, platinum, and palladium are considered commodities. Precious metals like gold and silver are often used as stores of value, while industrial metals like copper are crucial for manufacturing.
  3. Energy: This category includes crude oil, natural gas, heating oil, and gasoline. Energy commodities are heavily influenced by geopolitical factors, supply and demand dynamics, and global economic conditions.
  4. Livestock and Meat: Live cattle, pork bellies, and other meat products fall under this category. Demand for these commodities can be affected by dietary preferences, economic conditions, and global trade policies.
Commodities are traded on commodity exchanges around the world. These exchanges facilitate the buying and selling of commodities through various financial instruments like futures contracts and options.