In all fairness, the best commodity broker for you is very much dependant on your own financial goals. That is why we have selected our best commodity brokers based on those that provide a complete range of products and services for buying and selling commodities online. They can cater to the needs of all trading styles and experience levels.
You can open an account with IG to start trading commodities – including metals, energies and agricultural markets. Choose from 35 commodities or a range of commodity stocks and ETFs. Keep your costs down with spreads from just 2.8 points on Brent Crude and 0.3 on gold. You can focus on short-term profits with spread bets and CFDs or long-term investments by share dealing. Go long or short on market prices and see live market updates with IG’s in-platform newsfeed.
- Access a wide range of commodity markets
- Speculate on continuous prices
- Get the best commodity prices
- Achieve your trading goals
- Keep up to date on market movements
- Protect your capital
- Undated spot commodities and commodity futures
- Web, mobile app and advanced platforms
Trade the most popular commodities from around the world, including energies, agriculture and metals. IC Markets combines tight pricing and flexible conditions to give you one powerful product. IC Markets allows trading of spot energy contracts including Crude Oil, Brent, and Natural Gas from your MetaTrader 4 and 5 platforms against the US Dollar. Trading energy contracts as a spot instrument has many advantages for investors who are only interested in price speculation. IC Markets allows trading the spot price for metals including Gold or Silver against the US Dollar or Euro and the metals Platinum or Palladium against the US Dollar as a currency pair. In addition to energy and metal contracts, IC Markets we offer a range of soft commodity products to trade, including corn, soybeans, sugar, cocoa, coffee, and wheat as CFDs – all with low spreads.
- Over 22 Commodities to trade
- Energy, Agriculture and Metals
- Spot and Futures CFDs
- Spreads as low as 0.0 pips
- Deep liquidity
You can invest in a range of commodities with zero commission at AvaTrade through CFD (Contract For Difference) trading and take advantage of commodity price movements, both up and down. AvaTrade offers access to a wide range of commodity CFDs; from silver and gold trading, to sugar and crude oil, the options are limitless. Trading commodity CFDs can be an excellent way to diversify one’s trading portfolio and with the wide choice of available commodities, you can easily find a commodity to trade that will match your trading preferences and needs.
- Access to hard and soft commodities
- Powerful and intuitive MetaTrader 4 platform with a variety of tools and features
- Trade on mobile while on the go with the AvaTradeGO app
- Competitive spreads and no commission fees
- Access to professional, responsive and multilingual customer support available 24/5
With Pepperstone, you can trade Gold, Silver, Crude Oils, Natural gas and more with razor sharp pricing from multiple Tier 1 Banks, low spreads and fast execution, without worrying about physical delivery, ownership and rollovers. Get all your commodity trades filled in full with no partial execution or requotes. Pepperstone have an award-winning customer support team available 24hours 5 days per week, and 18hours on weekends. All Commodity CFDs are spot markets with no expiry and no rollovers.
- Competitive spreads from as low as 0.05 points on Gold
- Top Tier liquidity for reliable execution speeds
- No commission fees
- Go long or short on soft and hard commodities
- Trade confidently and securely with a regulated broker
- 24/5 customer service
XM clients can trade popular soft commodity, energy, and metals futures CFDs. Advantages of Commodity Trading at XM include trading without actually owning the financial instrument on which the contract is based. You can speculate on future uptrend/downtrend market price movements. There are no commission fees and spreads are very low.
- Instant exposure to global economies
- Ability to go short and profit from falling prices
- No commission fees
- Tight spreads
- Fast account opening
- Minimum $5 deposit
Commodities are raw materials that are either consumed directly, such as food, or used as building blocks to create other products. It is a basic good used in commerce that is interchangeable with other goods of the same type. A commodity market involves buying, selling, or trading a raw product, such as oil, gold, or coffee. Commodities that are traded are typically sorted into four categories broad categories: metal, energy, livestock and meat, and agricultural. Commodities can be classified as:
- Agriculture: grains, pulses such as corn, rice, wheat etc
- Precious metals: gold, palladium, silver and platinum etc
- Energy: crude oil, Brent Crude and renewable energy etc
- Metals and minerals: aluminium, iron ore, soda ash etc
- Services: energy services, mining services etc
Commodities can play a key role in determining the prices of other financial markets as they are used as an input during the manufacturing process. This means that national economies in general, and publicly-listed companies in particular, are often impacted by their prices. In fact, changes in the prices of commodities tends to have an effect upon the entire supply chain.
Individual commodity prices can fluctuate due to a number of varying factors such as supply and demand, exchange rates, inflation, and the overall health of the economy. In recent years, there has been an increased demand in commodities due to huge global infrastructure projects that are underway which has greatly influenced the price of commodities. Generally speaking, a rise in commodity prices has more often than not had a positive impact on the stocks of companies in related industries.
Commodities trading is very popular with investors and traders worldwide because this asset class offers a world of choice and the opportunity to invest on a diverse range of products.
Soft commodities, or softs, are commodities such as coffee, cocoa, sugar, corn, wheat, soybean, fruit and livestock. The term generally refers to commodities that are grown, rather than mined; the latter are known as hard commodities. Soft commodities play a major part in the futures market. They can be considered more volatile as their price-setting mechanism relies on multiple external factors. The production of such goods depends largely on the environmental conditions of a country.
A large part of the hard commodities market consists of energy goods, such as natural gas and crude oil. This segment also includes a variety of commonly used metals like steel, aluminium, gold, copper and silver. Since production and supply of hard commodities can be fairly accurately predicted, their performance is seen as an indicator of global economic health.
Investing in Commodities
For investors, commodities can be an important way to diversify their portfolios beyond traditional securities. They are considered to be one of the major asset classes of investment.
There are several ways to consider investing in commodities. One way is to purchase varying amounts of physical raw commodities, such as precious metal bullion. Investors can also invest through the use of futures contracts, CFDs or exchange-traded funds (ETFs) that directly track a specific commodity index. These can be considered highly volatile and complex investments that are generally recommended for sophisticated investors only.
Another way in which an investor can look to gain exposure to commodities is via mutual funds that invest in commodity-related businesses. For example, an oil and gas fund would likely own stocks issued by companies involved in energy exploration, refining, storage, and distribution.
Commodities can also be used as a hedge against inflation. If we consider that the price of commodities will often mirrors the inflation trends, investors sometimes use them in order to try and protect their funds during times of rising inflation. This is because the losses due to inflation can be offset by the rise in commodity prices.
There are two main types of commodity traders. Firstly, you have the buyers and producers of goods who use commodities for the purposes of hedging against price volatility in the future. These traders choose to buy contracts of commodities that they are interested in to make sure that they can take advantage of a predefined price in the future even if the market is volatile.
The second type of commodity trader is what we call a commodities speculator. These are traders who perform trades via a commodities broker in order to try and make a profit from the price volatility and grow their wealth. Since they are not interested in actually owning the commodities, they often trade commodities through cash-settlement futures and contract for differences (CFD). This allows them to speculate on whether the commodity price will rise or fall, making a profit or loss depending on if they were right or not. When trading via CFDs, you don’t take ownership of the underlying asset, which means you can take advantage of rising and falling markets by going long or short without needing to physically hold the commodity in question.
Commodity markets are attractive to speculators as they are susceptible to dramatic changes in supply and demand. The most traded Commodities are those which have an established market of buyers and sellers. This translates to high levels of liquidity and lower trading costs – two of the main attractions when trading Commodities CFDs.
If you want to invest in or trade commodities, you will need a commodities broker. They will provide you with a platform where you can buy and sell commodities at your pleasure. You simply open an account then download the desktop platform or mobile app and you will have access to the commodities market. The commodities market works just like any other market. It is a physical or a virtual space, where one can buy, sell or trade various commodities at current or future date.
Choosing A Commodity Broker
With so many commodity brokers out there, it can seem complicated when choosing the best commodity brokers for your own needs. Let’s take a look at some of the most important things to look out for during your search.
For us, regulation is of paramount importance. When you invest funds and trade online with a regulated brokerage firm, you can get more protection from the regulators should something go wrong. A regulated broker can give you that peace of mind that you are using a company that operates in a fair and transparent manner. There are many horror stories out there about unregulated brokers that have just vanished into thin air, leaving clients out of pocket.
Are you going to be investing in gold? To you want to trade energies? Whatever your preferred commodities are, you should check to make sure that they are included within the brokers investment products. The majority of brokers will also offer a range of different markets such as forex, stocks, indices and cryptos. Keep an eye out for other financial instruments if you would like to diversify your portfolio either now or at a later date.
If you are interested in other instruments, we have the following guides:
Commodity Broker Fees
Make sure you check and compare broker fees to find those with the most competitive prices. Whilst some brokers may offer zero commission fee, they may instead mark-up the spread. On the other hand, brokers that do charge commission fees, may have spreads starting from 0.0. Either way, the fee structure that you opt for can depend on your trading strategy. If you are planning on scalping commodity prices, you may need tighter spreads. If you are investing for the long run, you may not be so concerned about spreads. Other fees to look out for include inactivity fees, funding fees, overnight fees and any platform or tool fees.
Thankfully, when you trade commodities online, you don’t need to physically take ownership of the underlying asset. You can simply speculate on the price movements of said commodity. I mean, how would one physical store barrels of oil and where would you securely keep all of that gold!
That being said, a trading platform is where you will be buying and selling commodities. It is therefore important to make sure the platform is easy to use and has all of the tools you need to analyse the commodities market. Whilst some brokers have their own proprietary platforms, the MetaTrader platform is a popular choice for trading commodities. You may want to open a demo account to begin with, so that you can try out the brokers platforms to make sure that they are convenient enough for you.
If you are looking for an investment platform, please feel free to check out these free guides:
What are trading tools you ask? These are handy bits of software that can help to improve your overall trading experience. They range from basic trade calculators for planning positions to complex software packages that will analyse the markets for trading signals. If you already have experience with a particular trading tool, you may want to check that the broker in question provides it. Otherwise, check for what tools the broker offers clients and think about if they will be useful to help you when trading commodities online.
Of course, not everyone has experience when it comes to investing in commodities. For that reason, we like to see brokers supply beginners with a good range of educational resources in order to help them improve their trading skills and knowledge of the markets. This can include commodity investing guides and platform tutorial videos. In addition, any up to date market analysis and research articles, can be a great to help us keep on top of the latest market movements and inspire potential trade ideas.
If you want trade online with a commodities broker, you will need to fund your account. Brokers support various funding methods, including bank transfers and credit/debit cards. We always like to check if a broker supports e-wallet payments as this can deliver more flexibility and convenience. If you want funds to land in your trading account as soon as possible, you will need to check that the broker has an instantaneous payment process. That way, you can get started right away.
Some brokers have a minimum deposit requirement. It can range anything from hundreds to thousands of your account base currency. Whatever it is, make sure that it is within your range and as the saying goes, never ever risk more than you can afford to lose.
When we rate commodity brokers, one of the most important things that we take into consideration is how good or bad the customer support is. We expect a fast and reliable response from customer service. The more availability there is the better. Ideally, we would want 24/7 live chat support as this way we can get an instant answer to our question at any time. Email and telephone support 24/5 would be the minimum we expect. Consider where the brokers’ offices are located and what languages the support team speak.
Trading commodities can be a fun and rewarding experience, especially when using the right broker. There are plenty of choices out there, but the best commodities broker for you, will depend on what your own financial goals are. Some of the key things to look out for are regulation, safety, funding, instruments, fees, platforms, tools, resources and support.