Growing affinity and demand of commodity trading

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Civilizations of the ancient era traded a diverse range of commodities, comprising livestock, cotton, seashells, spices, silk and gold. Even if the product quality, transportation mode and delivery were often changeable, commodity trading was an important business.

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Growing affinity and demand of commodity trading

  1. 1. Growing affinity and demand of commodity trading
  2. 2. Civilizations of the ancient era traded a diverse range of commodities, comprising livestock, cotton, seashells, spices, silk and gold. Even if the product quality, transportation mode and delivery were often changeable, commodity trading was an important business.
  3. 3. The strength of an empire was measured by their ability to generate and run complex systems of commodity trading, as this served as the wheel of commerce, economic growth and means of taxation for filling the kingdom's treasury. Reputation and consistency were critical keystones to create the trust of ancient merchants, buyers and suppliers.
  4. 4. Ranging from the spices used to cook meals to the gas utilized to power the luxury vehicles and enable heating of the homes, various commodities play an essential role in the everyday lives.
  5. 5. • These can be found literally all across the globe, and are able to be traded on the global marketplace. • In fact, the commodities act as a part of a diversified portfolio of investment. • In reality, trillions of dollars are involved in commodity trading that is carried out every day.
  6. 6. • Fundamental economic principles normally follow the commodity trading in markets: higher supply equals lower prices. • For example, investors can pursue closely the statistics and patterns in livestock. • Major interruptions in supply and prevalent health scares can pave a way for investing fluctuations, provided that the livestock demand in long-term is normally predictable.
  7. 7. • Commodity trading as a whole, is a little unpredictable. • Frankly speaking, investing in definite commodities can be a risky plan, if a trader is not an out-and-out speculator without the necessary diligence and motivation. • Some commodity trading are more rational in nature.
  8. 8. • Volatile markets or bearish trends normally find petrified investors jostling to transfer cash to the prized metals like silver and gold, this has historically been perceived as a consistent and steady metal with a conveyable worth. • Investors losing money in the stocks can make it up with excellent returns by commodity trading in metals. • Metals are used as a hedge in the face of high inflation or phases of devaluation in currency.
  9. 9. • Investing in energy is a sought after form of commodity trading. • Global economic growth and ever-decreasing and depleted oil output from wells can lead to an upward pitch in oil prices, as investors evaluate and assess limited supplies of crude oil with mounting energy demands.
  10. 10. • However, positive outlook regarding the oil price should be kept with certain deliberations. • Recessions, production and policy changes by OPEC and emerging technological innovations such as wind and solar energy that aim to replace or complement crude oil as an energy supply should also be taken into account. For more information visit: www.forexminute.com

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