Best Commodity Trading Platforms UK 2023

Selecting the right commodity trading platform is crucial in the fast-paced trading world.

I’ve tested, scored, and ranked the best commodity trading platform in the UK.

Whether you’re seeking security, user-friendliness, or extensive trading options, I’ve got you covered.

So, in a nutshell, what are the best commodity trading platforms in the UK? The best commodity trading platforms in the UK are eToro, Plus500, and IG. eToro is known for its user-friendly interface and social trading features, Plus500 provides a straightforward CFD platform and competitive spreads, while IG offers a wide range of educational materials and trading tools.

Top Commodity Trading Platforms Ranked

Here is a quick list of the best commodity trading platforms to use in the UK based on my hands-on analysis:

1. eToro – Overall best commodity trading platform UK for beginners
2. Plus500 – One of the best UK commodity trading platforms for CFDs
3. IG – Publicly traded & trusted commodity trading broker UK
4. AvaTrade – Best commodity trading platform with low spreads
5. Saxo Markets – Best commodity trading broker UK with low fees
6. Interactive Brokers – Best commodity broker UK for active traders
7. Pepperstone – Commodity trading platform for beginners with low fees

Best Commodity Trading Platforms Compared for UK Traders

Here I’ve compared the commodity trading platforms based on four key factors you must consider and compare:

Rank	Platform	No. of commodities	Minimum deposit	Fees	Account types
1	eToro	32	$10	Gold 0.9, Oil 1.4	CFDs, investing
2	Plus500	22	$100	Gold 41 pips, Oil 4 pips	CFDs
3	IG	35	£250	Gold 0.3, Oil 0.28	CFDs, spread betting, DMA, investing
4	AvaTrade	17	£100	Gold $0.34, Oil $0.03	CFDs
5	Saxo Markets	25	£1	Gold 0.5, Oil 0.28	CFDs, futures & options, DMA, investing
6	Interactive Brokers	20	£2,000	Gold 0.0007%, Oil 0.0007%	CFDs, DMA, futures & options, investing
7	Pepperstone	28	£1	Gold 0.5, Oil 2.5	CFDs, spread betting

Best Commodity Trading Platform UK Reviews

Research shows that the commodity trading industry has enjoyed an upward trend over the past five years, with commodity trading value pools almost doubling from $27 billion in 2018 to an estimated $52 billion of EBIT in 2021¹.

Choosing the best commodity trading platform is crucial for newcomers in the market.

Having worked in the retail investment sector in London over the last four years, I had the opportunity to experience the rise first-hand.

Additionally, in my role working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”, I was able to work with and test some of the biggest commodity trading brokers on the market.

Using my experience in this field, I’ve compiled a list of the best commodity trading platforms in the UK based on four key criteria:

1. Number of commodities available
2. Minimum deposit
3. Fees (points)
4. Account types

Factors such as usability, trading platforms available, research tools, educational materials, and additional features were also considered.

All the commodity trading apps and platforms I’ve reviewed below are regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA).

1. eToro – Overall best commodity trading platform UK for beginners

The overall winner on my list of the best commodity trading platforms and what I recommend to beginners is eToro.

At eToro, you can easily trade commodities with a minimum deposit of just $10 and a $5 withdrawal fee.

It’s a simple-to-use platform with a range of commonly traded commodities and a trading app.

eToro also offers educational materials, such as a range of tutorials, videos, and articles, to help you learn about the markets. It also has a copy-trading feature, allowing you to copy the trades of experienced traders.

With eToro, you can also invest in stocks, indices, ETFs, commodities, currencies, and cryptocurrencies.

The fees are competitive and the platform is user-friendly, making it a great choice for beginner traders.

Read my eToro review.

Key rating criteria:

No. of commodities	Minimum deposit	Fees	Account types
32	$10	Gold 0.9, Oil 1.4	CFDs, investing

Pros:

• Copy trading feature
• Easy-to-use trading platform
• Smart Portfolios & Learning Academy

Cons:

• Withdrawal fees

2. Plus500 – One of the best UK commodity trading platforms for CFDs

Plus500 offers a free demo account with £40,000 and charges £10 for each withdrawal after the first five.

This makes it an attractive option for those looking to start trading commodities.

The trading platform also has no deposit or inactivity fees, making it one of the more cost-effective options for those looking to get into commodity trading.

Plus500’s simple-to-use platform offers access to a variety of commodities, making it a great choice for both experienced and novice traders. Beginners must use the demo account and the Trading Academy to gain experience before trading with real capital due to the risks involved.

The platform also has comprehensive educational and research materials, making it a great option for those just starting.

In addition, Plus500’s trading fees are low compared to other platforms, allowing traders to save on costs.

All in all, Plus500 is a great choice for those looking to start trading commodities in the UK.

Read my Plus500 review.

No. of commodities	Minimum deposit	Fees	Account types
22	$100	Gold 41 pips, Oil 4 pips	CFDs

Pros:

• 24/7 customer support
• Zero commissions
• No transaction fees

Cons:

• Minimal research tools

3. IG – Publicly traded & trusted commodity trading broker UK

"68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money."

IG offers access to a range of commodities with low fees, and no deposit or withdrawal fee, making it a great option for those looking to save on costs.

With access to over 35 commodities, IG has competitive spreads and charges a low commission on trades.

IG’s trading platform is user-friendly and intuitive and provides access to a full range of charting and trading tools.

The minimum deposit is low, and there is no inactivity fee if your account is inactive for two years.

Trading with IG is cost-effective and efficient, giving you the ability to take advantage of market opportunities quickly.

IG also has a comprehensive educational offering, with courses, webinars, and trading guides to help you become more knowledgeable.

With these features, IG is a great choice for those looking to invest in commodities.

Read my IG review.

Key rating criteria:

No. of commodities	Minimum deposit	Fees	Account types
35	£250	Gold 0.3, Oil 0.28	CFDs, spread betting, DMA, investing

Pros:

• Intuitive trading platform
• Extensive research/education
• 35+ commodity options

Cons:

• High trading fees
• $200 minimum deposit

4. AvaTrade – Best commodity trading platform with low spreads

AvaTrade provides you with access to 27 commodity CFDs and its educational offering is comprehensive.

You’ll have access to commodities such as gold, silver, oil, sugar, wheat, and more.

The platform also provides market analysis tools, trading alerts, and up-to-date market commentary.

The minimum deposit at AvaTrade is $100 and there’s no withdrawal fee. AvaTrade has a knowledgeable and helpful customer support team.

The platform is easy to use and navigate, providing a great experience for beginners and experienced traders alike.

Read my AvaTrade review.

Key rating criteria:

No. of commodities	Minimum deposit	Fees	Account types
17	£100	Gold $0.34, Oil $0.03	CFDs

Pros:

• Diverse automated trading options suitable for both beginners and experts
• Minimal initial deposit requirements
• A broad spectrum of commodity trading including agriculture, energy, and metals
• High leverage of up to 200:1 available for major soft commodities

Cons:

• Commodity trading limited to CFDs
• A high minimum deposit needed for social and copy trading platforms

5. Saxo Markets – Best commodity trading broker UK with low fees

Saxo Markets provides a wide range of futures across global exchanges with advanced trading tools, making it an ideal choice for experienced traders seeking to diversify their portfolios.

With access to over 300 futures, Saxo Markets offers low fees and a comprehensive offering for experienced traders.

The platform has many advanced features such as advanced charting tools and a range of risk management tools.

Saxo Markets also provides access to research materials and educational content to help traders become more informed.

With low trading fees and no deposit or withdrawal fee, Saxo Markets is a great choice for experienced traders looking for a reliable trading platform.

Read my Saxo Markets review.

Key rating criteria:

No. of commodities	Minimum deposit	Fees	Account types
25	£1	Gold 0.5, Oil 0.28	CFDs, futures & options, DMA, investing

Pros:

• Low commission rates
• Zero hidden costs per trade
• Fully adaptable trading interface
• Extensive selection of investment products

Cons:

• High initial deposit to open an account

6. Interactive Brokers – Best commodity broker for active traders

Interactive Brokers stand out as a competitive option for commodity trading in the UK, especially for individuals who are budget-conscious or frequent traders.

What sets it apart is the reportedly low trading fees across a variety of commodities.

This affordability, combined with a wide selection of commodities to trade with, has been successful in attracting thousands of traders.

In addition to its cost-effectiveness, Interactive Brokers also offers a robust collection of educational and research materials.

These high-quality resources make it a particularly appealing choice for beginners wishing to deepen their understanding of commodity trading and boost their profit potential.

One of the other highlights of Interactive Brokers is its range of trading platforms, catering to various levels of trading experience.

From beginners to advanced traders, Interactive Brokers offers a platform to match your proficiency level.

Interactive Brokers also maintains a favourable fee structure beyond trading, with no minimum deposit, no withdrawal fee, and no inactivity fee, further enhancing its appeal.

With its long track history and multiple awards, Interactive Brokers has built a solid reputation in the UK and globally.

If you’re planning on frequent trading in the commodity market and are looking for a low-cost option with ample educational resources, Interactive Brokers might be worth considering.

Read my Interactive Brokers review.

Key rating criteria:

No. of commodities	Minimum deposit	Fees	Account types
20	£2,000	Gold 0.0007%, Oil 0.0007%	CFDs, DMA, futures & options, investing

Pros:

• Low fees
• Top research/education
• Advanced trading platform

Cons:

• Inactivity fees
• Steep learning curve

7. Pepperstone – Commodity trading platform for beginners with low fees

Pepperstone has distinguished itself as a leading commodity trading platform in the UK, particularly suited to beginners looking to develop their trading skills.

Notable for its user-friendly interface, Pepperstone offers access to over 800 tradable assets, which include an extensive range of commodities such as gold, silver, Spot Crude, Spot Brent, and natural gas.

All of these commodities can be traded as CFDs on their intuitive platform.

One of the key advantages of Pepperstone is its competitive fee structure.

With some of the lowest spreads in the market, Pepperstone offers an excellent starting point for beginners who aren’t ready to commit a large amount of capital.

Additionally, the absence of inactivity fees, account fees, commissions on the standard account, and minimum deposit requirements make it a highly cost-effective trading option.

Another standout feature of Pepperstone is its variety of trading platforms, including the popular MetaTrader platforms.

There are also several social trading platforms with a thriving community that beginners can learn from.

Fast execution and a 99.94% full rate ensure that trading opportunities are never missed.

Complementing its strong trading features, Pepperstone provides award-winning customer service that’s available 24/5, with additional support for 18 hours on weekends.

Anytime trading issues arise, a reliable and responsive customer support team is readily available.

Coupled with helpful account managers, traders are guaranteed a smooth trading experience.

Pepperstone offers an impressive blend of user-friendly design, a comprehensive range of commodities, low spreads, and excellent customer service, making it a highly recommendable option for commodity trading in the UK.

Read my Pepperstone review.

Key rating criteria:

No. of commodities	Minimum deposit	Fees	Account types
28	£1	Gold 0.5, Oil 2.5	CFDs, spread betting

Pros:

• Competitive spreads
• Hassle-free deposit and withdrawal process
• Swift and simplified account opening

Cons:

• Insufficient educational resource

How to Choose the Best Commodity Trading Platform

When deciding on the best commodity trading platform for your needs, there are several factors to consider.

Along with the key rating criteria I used to rank the platforms, here’s what to look for:

1. Consider your trading goals: Determine your specific trading goals and requirements. Are you interested in trading a specific commodity or a range of commodities? Do you prefer short-term or long-term trading? Consider whether the platform supports the commodities and trading strategies that align with your goals.
2. Platform usability & interface: Evaluate the platform’s usability and interface. Is the platform user-friendly and intuitive? Test out demo trading accounts or free trials to get a feel for the platform’s layout, order execution speed, and overall user experience. A well-designed and easy-to-navigate platform can enhance your trading efficiency.
3. Market access: Check which markets the platform provides access to. Ensure that it offers the commodities you wish to trade, and if you have a specific preference for trading on domestic or international markets, make sure the platform supports those markets.
4. Security & regulation: Security should be a top priority when choosing a trading platform. Verify that the platform is regulated by a reputable financial authority. Regulatory oversight helps ensure that the platform follows standard practices, provides customer protection, and maintains segregated client accounts.
5. Fees & costs: Understand the fee structure of the platform. Look for transparency in pricing and consider factors such as commission fees, spreads, funding fees, and any additional charges. Evaluate how the costs will impact your trading performance, especially if you plan to trade frequently or on a large scale.
6. Research & educational resources: Consider the availability of research tools, market analysis, and educational resources provided by the platform. Access to real-time data, charts, technical analysis tools, and educational materials can be valuable for making informed trading decisions.
7. Customer support: Good customer support is essential, especially if you encounter issues or have questions. Check the availability and responsiveness of customer support channels such as phone, email, or live chat. Prompt and helpful customer service can significantly impact your trading experience.
8. Mobile trading capabilities: If you prefer to trade on the go, check whether the platform offers mobile trading options. A reliable mobile app with essential features can allow you to monitor and manage your trades conveniently from anywhere.
9. User reviews & recommendations: Read user reviews and seek recommendations from other traders to gather insights into their experiences with different platforms. While individual experiences may vary, user feedback can provide valuable information and help you assess the platform’s strengths and weaknesses.

Remember that the best commodity trading platform for you ultimately depends on your specific needs, preferences, and trading style. Research these aspects well to pick a platform that fits your trading goals.

What Is Commodity Trading?

Commodity trading refers to the buying and selling of commodities, which are raw materials or primary agricultural products that can be bought and sold in standardised forms².

Examples of commodities include crude oil, natural gas, gold, silver, wheat, corn, coffee, and cotton.

Commodity trading can take place in various forms, including spot trading and futures trading.

1. Spot Trading: Spot trading involves the immediate buying or selling of commodities for delivery at present or within a short period. In spot trading, the buyer pays the current market price and takes immediate possession of the commodity. Spot trading is typically used for commodities that are perishable or have a short shelf life.
2. Futures Trading: Futures trading involves the buying or selling of contracts that represent an agreement to buy or sell a specific quantity of a commodity at a predetermined price and future date. Futures contracts are standardised and traded on commodity exchanges. They allow traders to speculate on the future price movements of commodities without taking physical delivery of the underlying asset³.

Commodity trading serves various purposes and attracts different participants, including producers, consumers, traders, and speculators.

Here are some common motivations for engaging in commodity trading:

1. Hedging: Producers and consumers of commodities may engage in commodity trading to manage price risks associated with their operations. By taking positions in commodity futures contracts, they can protect themselves against adverse price movements. For example, a farmer can hedge against a potential decrease in the price of wheat by selling wheat futures contracts.
2. Speculation: Speculators enter the commodity markets to profit from price fluctuations. They buy or sell commodities or futures contracts based on their analysis of supply and demand dynamics, market trends, and other factors. Speculators can take advantage of both rising and falling prices.
3. Investment: Some investors include commodities in their investment portfolios as a means of diversification. Commodities, such as gold or oil, are often seen as a hedge against inflation or geopolitical uncertainties. Investors can gain exposure to commodities through commodity exchange-traded funds (ETFs), mutual funds, or direct investments in commodity-related companies.

Commodity trading can be conducted through various platforms, including commodity exchanges, online trading platforms, and brokerage firms.

Traders analyse market trends, monitor supply and demand factors, and use technical and fundamental analysis tools to make informed trading decisions.

It’s important to note that commodity trading involves risks, including price volatility, leverage, and the impact of geopolitical and economic factors.

Traders should carefully evaluate the risks and develop risk management strategies before participating in commodity trading.

I’ve shared a good video below for a further understanding of what commodity trading is:

Pros & Cons of Commodities Trading

Commodity trading can be an effective way to diversify your investment portfolio and manage risk.

However, it’s not without its challenges. Here are some pros and cons to consider:

Pros:

• Diversification: Commodities usually have a low correlation to stocks and bonds, making them a good way to diversify your portfolio and spread risk.
• Inflation Protection: Commodities often perform well during periods of inflation. As the cost of goods rises, the price of commodities used to produce those goods can also increase.
• High Potential Returns: Commodities can offer substantial return potential. For instance, prices can skyrocket in response to supply disruptions caused by geopolitical events or natural disasters.
• Liquidity: Some commodities markets, like gold or oil, are incredibly liquid, enabling investors to quickly enter or exit positions.

Cons:

• High Volatility: Commodity prices can be extremely volatile, influenced by unpredictable factors such as weather patterns, geopolitical tensions, and economic cycles⁴.
• Speculative Nature: Commodity markets are often dominated by speculators looking to profit from short-term price fluctuations rather than long-term investors, which can increase volatility.
• Complex Market: Understanding the commodities market requires knowledge of complex factors, including international trade laws, supply and demand dynamics, and geopolitical influences.
• Leverage Risk: Many commodity trades involve leverage, which can magnify both profits and losses. Using leverage can lead to substantial losses if the commodity price moves against your position.

While commodities can offer a unique set of benefits, they should be approached with caution and incorporated into a balanced portfolio alongside other types of investments.

Different Types of Commodities Used for Trading

Commodities used for trading can be broadly categorised into four main types:

Energy Commodities: Energy commodities are resources used to generate power or fuel various industries.

• Crude Oil: The most actively traded energy commodity, used primarily as a source of fuel for transportation and energy production.
• Natural Gas: A versatile energy commodity used for heating, electricity generation, and industrial processes.
• Heating Oil: Also known as petroleum distillates, heating oil is used for heating homes and businesses.
• Gasoline: Refined from crude oil, gasoline is the primary fuel for automobiles.

Metal Commodities: Metal commodities are metals used in industrial production, construction, and manufacturing.

• Gold: A precious metal often used as a store of value and for jewelry production.
• Silver: Another precious metal used in jewelry, silverware, and industrial applications.
• Copper: A widely used industrial metal in electrical wiring, plumbing, and construction.
• Aluminum: A lightweight and corrosion-resistant metal used in various industries, including transportation and packaging.
• Platinum: A precious metal used in jewelry, catalytic converters, and industrial applications.
• Palladium: Primarily used in the automotive industry for catalytic converters.
• Iron Ore: The main ingredient in steel production.

Agricultural Commodities: Agricultural commodities encompass various crops and livestock.

• Wheat: One of the most widely cultivated cereal crops, used in bread and bakery products.
• Corn: Used for animal feed, ethanol production, and various food products.
• Soybeans: A versatile crop used in animal feed, cooking oil, and food products.
• Cotton: Used for textile production.
• Coffee: A popular beverage crop.
• Sugar: Used in food and beverage production.
• Cocoa: The main ingredient in chocolate production.
• Livestock: Includes cattle, hogs, and poultry, traded for meat production.

Soft Commodities: Soft commodities include non-metallic, agricultural-based commodities.

• Rubber: Used in tire production and various industrial applications.
• Timber: Used for construction, furniture, and paper production.
• Wool: Used in textile and clothing manufacturing.
• Fertilisers: Essential for agricultural productivity, including nitrogen, phosphate, and potassium-based fertilisers.

It’s worth noting that not all commodities are traded in the same way or on the same exchanges.

Some commodities, like oil and metals, have well-established futures markets, while others may have more localised or specialised trading platforms.

Additionally, the availability and tradability of specific commodities may vary depending on the region or exchange.

How Do I Start Trading Commodities?

To start trading commodities, you can follow these general steps:

1. Educate Yourself: Acquire a solid understanding of commodity markets, trading strategies, and risk management. Learn about the factors that influence commodity prices, supply and demand dynamics, and the basics of technical and fundamental analysis. Books, online resources, courses, and seminars can provide valuable knowledge.
2. Set Trading Goals and Risk Tolerance: Determine your trading goals, risk tolerance, and investment capital. Consider whether you want to trade commodities as a full-time profession or as part of a diversified investment portfolio. Establishing clear goals will help you develop a trading plan and manage your risk effectively.
3. Choose a Commodity Broker: Select a reputable commodity broker or trading platform that suits your needs. Look for a broker that offers access to the commodities you want to trade, has a user-friendly interface, competitive fees, and reliable customer support. Ensure that the broker is properly regulated and provides a secure trading environment.
4. Open a Trading Account: Once you’ve chosen a broker, open a trading account with them. The account opening process typically involves completing an application, providing identification documents, and funding your account. Follow the broker’s instructions and comply with any verification requirements.
5. Develop a Trading Strategy: Develop a trading strategy that aligns with your goals and risk tolerance. Determine the types of commodities you want to trade, the timeframes you will focus on (short-term or long-term), and the indicators or tools you will use for analysis. Establish clear entry and exit criteria, risk management techniques (such as setting stop-loss orders), and position sizing guidelines⁵.
6. Practice with a Demo Account: Many brokers offer demo accounts or simulated trading platforms. Utilise these accounts to practice your trading strategies and gain experience without risking real money. Use this opportunity to refine your approach, test different techniques, and gain confidence in your trading decisions.
7. Start Trading with Real Funds: Once you feel comfortable and confident with your strategy, you can start trading with real funds. Start with a capital amount you can afford to risk and gradually increase your position sizes as you gain experience and demonstrate consistent profitability. Be disciplined and stick to your trading plan, avoiding impulsive decisions based on emotions.
8. Monitor the Markets and Adapt: Stay informed about market news, economic indicators, and events that can impact commodity prices. Continuously monitor the markets, track your trades, and analyse your performance. Make adjustments to your strategy as needed based on market conditions and lessons learned from your trading experiences.
9. Risk Management: Implement proper risk management techniques to protect your capital. Set realistic profit targets and risk-reward ratios for each trade. Use stop-loss orders to limit potential losses and trailing stops to lock in profits as a trade moves in your favor. Diversify your commodity positions to mitigate risks associated with a single commodity or sector.
10. Continuous Learning: Commodity trading is a continuous learning process. Stay updated with industry developments, economic trends, and new trading strategies. Attend webinars, read books and articles, and engage with other traders to expand your knowledge and refine your skills.

For more details, check out my guide on how to invest in commodities UK.

How Does Commodity Trading Differ From Buying Stocks and Shares?

Aspect	Commodity Trading	Buying Stocks and Shares
Underlying Assets	Influenced by supply, demand, and commodity-specific factors	Ownership in a company or its shares
Market Dynamics	Producers, consumers, traders, and speculators	Influenced by company performance, industry trends and broader market conditions
Trading Mechanisms	Spot trading and futures trading on commodity exchanges	Trading on stock exchanges at prevailing market prices
Risk Profile	Higher inherent risk due to commodity price volatility	Relatively lower risk with factors specific to the company and market sentiment
Market Participants	Supply and demand analysis, seasonal patterns, and reacting to news events	Individual investors, institutional investors, mutual funds and hedge funds
Trading Strategies	Financial statement analysis, company news, and industry trends	Influenced by company performance, industry trends, and broader market conditions
Regulatory Environment	Regulated by commodity futures exchanges and governmental agencies	Regulated by securities commissions or similar regulatory bodies

Is Commodities Trading Risky?

Commodities trading can indeed be risky, mainly due to a few key factors:

1. Market Volatility: The prices of commodities can be highly volatile and influenced by a wide range of unpredictable factors. This includes changes in weather patterns that can impact agricultural commodities, geopolitical events affecting energy commodities, and economic cycles that can sway all types of commodities.
2. Leverage Risk: Many commodities trades involve leverage, which can amplify gains when the price moves in your favor, but it can equally magnify losses when the price moves against you. This high degree of leverage can result in significant losses, potentially more than your initial investment.
3. Complex Market: The commodities market is complex, requiring a deep understanding of global supply and demand dynamics, geopolitical influences, and specific sector knowledge. A lack of understanding or misjudgment in these areas can lead to costly mistakes.
4. Speculative Nature: The commodities market is often driven by speculators, looking to profit from short-term price fluctuations. This speculative nature can lead to dramatic price swings, making it possible for traders to experience significant losses.

It’s essential for anyone considering commodities trading to understand these risks and have a well-thought-out risk management strategy in place.

What Influences Commodity Prices?

Commodity prices can be influenced by a variety of factors, some of which can be very unpredictable.

Here are some of the key factors that can influence commodity prices:

1. Supply & Demand: The fundamental economic principle of supply and demand is the primary driver of commodity prices. If demand for a commodity exceeds supply, prices will rise. Conversely, if supply outstrips demand, prices can fall.
2. Weather & Environmental Factors: Weather can greatly impact the supply of commodities, particularly agricultural products. Droughts, floods, and other natural disasters can damage crops and decrease supply, causing prices to rise.
3. Economic Data: Economic data and indicators can impact commodities. For instance, strong economic growth can increase demand for commodities, driving up prices. Conversely, a slowdown in the economy can decrease demand, leading to lower prices.
4. Currency Values: Commodities are typically priced in US dollars. Therefore, changes in the value of the dollar can affect commodity prices. If the dollar weakens, commodities become cheaper for foreign buyers, potentially increasing demand and driving up prices.
5. Geopolitical Events: Geopolitical events can impact supply and demand for commodities. For example, political instability in oil-producing regions can disrupt supply, causing oil prices to rise⁶.
6. Inflation: Commodities can serve as a hedge against inflation. When inflation rises, the value of money decreases, but the relative value of tangible assets like commodities can increase.
7. Government Policies & Regulations: Government policies and regulations can also impact commodity prices. Changes in trade policies, tariffs, environmental regulations, and production quotas can all influence supply and demand.

These factors often interact in complex ways, making commodity pricing quite volatile and difficult to predict.

Therefore, you need to monitor these factors and consider how they may impact various commodities.

Final Thoughts

Commodity trading is an exciting and potentially lucrative way to invest.

With the right platform, you can make informed decisions and take advantage of price fluctuations.

I’ve outlined some of the best commodity trading platforms available in the UK, each with its distinct features and fees.

Ultimately, it’s up to you to decide which platform is the best fit for your trading needs.

But, for beginners, I’d recommend eToro as the best commodity trading platform in the UK.

FAQs

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Sources:

1. https://www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/the-future-of-commodity-trading ↩︎
2. https://www.investor.gov/introduction-investing/investing-basics/investment-products/commodities ↩︎
3. https://www.le.ac.uk/users/dsgp1/COURSES/DERIVATE/LectSlide1.pdf ↩︎
4. https://legacy.farmdoc.illinois.edu/nccc134/conf_1999/pdf/confp16-99.pdf ↩︎
5. https://core.ac.uk/download/77009345.pdf ↩︎
6. https://uh.edu/news-events/stories/2011articles/March2011/031011PirrongGasPrices.php ↩︎