Investing in commodities and metals
Can you earn money on coffee, wheat or copper? For many it seems unrealistic and distant, especially when you don’t come into contact with these commodities, but are you sure?
Meanwhile, gold, silver and coffee can bring a lot of money to those who know how to invest in them. What are the most popular and what are the most profitable commodities to invest your capital in?
Why is it worth investing in commodities?
You can have more money by multiplying your earnings. Investing is a form of increasing wealth that has been known for centuries and is gaining more and more supporters. Why?
You can buy a better car, go on holiday more often, take care of the capital for the next generations and lead a high-quality life.
You can enjoy an additional source of funds without taking another job. How? By investing, money multiplies while the investor leads his life.
Nowadays, different forms of investment allow people to choose the area of the economy in which they want to put capital. Recently, investing in commodities has become fascinating and popular. This does not mean buying a product in large quantities and selling it at a higher price to earn money. This form of investment is based on the principles of futures trading in the selected commodity. Thanks to investing in contracts, due to the financial leverage, it is possible to obtain a higher profit than with the physical trading of bullion, fuel or other materials. This means that investing money in oil does not mean keeping a barrel in the garden, but being a representative of its securities.
What impacts the commodities market most?
Elements that affect the value of commodities:
Weather and climate, which primarily affect natural resources and their derivatives – cereals, cocoa, coffee and other agricultural products. This is related to the harvest period, which dictates high supply and thus lower purchase prices of these goods. The opposite is true during sowing when the weather risk and crop success are high. Then speculators even receive premiums for weather risk
The political situation of a country – international conflicts, embargoes and other trade restrictions imposed – has a significant impact on the increase in commodities prices.
Economic prosperity, which is directly related to supply and demand. Why? Fast-growing economic units generate high demand and thus enjoy the interest of investors.
Metals are also commodities. Which of them are most popular among investors?
If you want to make money on certain commodities, it is worthwhile to think about metals such as gold, silver and copper. 64% of investments are invested in gold because it is used in industry, banking and medicine. So you can invest your money quickly and safely, focusing on a well-known and popular commercial commodity. Copper, in turn, is very popular in Asian countries, which are developing very dynamically. There, the economic situation is strongly dependent on the price of copper, which is used in construction.
What are the most popular commodities for investment?
Can you effectively trade on coffee or grain? This seems to be a return to prehistory, but it is real. That’s enough! You can make a lot of money by investing in goods of natural origin. What kind of goods?
Coffee, which is no longer known as a luxury commodity, brings extra income to many investors every year, so financial tools (contracts and shares) provide the opportunity to take possession of it.
Cocoa, which is used to make chocolate, is also able to sweeten investors’ portfolios, although it is an uncertain commodity in the context of stock exchange trading, mainly due to the distance of countries that specialize in its cultivation (Ghana or Ivory Coast).
Cereals, which are gold-planting, but can also gold-plant the lives of investors, are a popular stock exchange commodity because they are an indigenous element of the economy, hence their cultivation method or the climatic conditions in which they grow.