Commodities Worthy The Attention i.e. Coffee, Precious Metals And Key Energy Resource Goods

Oil Is An Indicator Of The Health Of The Global Economy

The most interesting goods.

Gold (GOLD)

Gold is the most important precious metal in the world. Due to its attractive appearance, it is used primarily in jewelry. However, historically, gold was the first type of money, which was related to the chemical properties of this metal, as well as its appearance. Monetary systems around the world were also based on gold, although this changed with the collapse of the Bretton system Woods , which kept the ratio of gold prices to the U.S. dollar constant. Since then, in addition to being used in jewelry, gold has also served as an investment or a store of value (e.g. as a reserve in central banks). To a lesser extent, gold is also used in industry.

The most important market report for gold is the quarterly World Gold Council Supply and Demand Report . It contains data on the use of metal in individual sectors, mining, international trade and the impact of market factors on prices. The report is released to the market approximately 1-1.5 months after the end of a given quarter. In addition, it is worth following data on the amount of gold in the possession of ETFs that hedge with this metal, or data on the positioning of speculative investors on this market.

Investors interested in the gold market can take a riskier investment and invest in the world's largest gold mining companies such as Newmont NEM.US , Anglogold Ashanti AU.US , Barrick Gold GOLD.US or Wheaton resources WPM.US , which will also provide exposure to other precious metals.

On the other hand, investors looking for a safe ETF that provides exposure to gold prices may lean towards iShares Physical Gold IGLN.UK. _ This fund hedges its investors' positions with physical gold deliveries, accumulates stocks of this metal and reports them regularly, thus attracting investors interested in investing in physical gold.

Petroleum (OIL)

Oil is by far the most important commodity in the world. Without oil, it would not be possible to travel or produce the plastic products that are essential in the modern world. Crude oil is mainly extracted from deep boreholes, either on land or in seas and oceans, but also from tar sands (mostly in Canada).

The key report for the oil market is the DOE (US Department of Energy) report, presented every Wednesday at 4:30 p.m. Central European Time. Then, data on crude oil stocks, petroleum products, production, imports and exports are presented. This data only applies to the US, but since it is the most important market, this data shapes the behavior of prices in the market. In addition, every month OPEC, EIA and IEA publish reports on the demand and supply outlook. The OPEC report is released roughly 1.5 weeks into the month.

Companies that typically benefit from oil price volatility include ExxonMobil XOM.US , Chevron CVX.US and Occidental Petroleum OXY.US , whose shares were purchased in Q1 2022 by Warren Buffett . Exposure to a diversified portfolio of oil exploration and trading companies is ensured by, among others, Euro-denominated ETF iShares STOXX Europe 600 Oil&Gas Exploration UCITS SXEPEX.DE .

Natural Gas (NATGAS)

Along with crude oil and coal, natural gas is a key energy resource. Depending on where it is used, it is used for heating or for generating electricity. In the case of gas, the market is not homogeneous due to major problems with its transport. The price of gas transported by pipeline is much lower than gas that must be liquefied and shipped by ship. The most important producers of natural gas in the world are the United States, Russia, Arab countries and Australia. The largest importers are European countries, China, India and Japan.

The most important report for the gas market is the weekly change in DOE inventories published every Thursday at 16:30 CET. In addition, it is worth following the daily change in gas stocks in Europe according to GIE ( Gas Infrastructure Europe) and TTF gas prices in the import-export hub in the Netherlands. These data may show how much demand for American gas may come from Europe. Volatility could then affect the shares of Cheniere Energy LNG.US , the company responsible for transporting LNG from the US to Europe. British may be worth mentioning

gas ETF NGAS.UK , which tracks the natural gas sub -index offered by Bloomberg.

Silver (SILVER)

In terms of chemical properties, silver is very similar to gold, but because there is much more of it in the ground, it is also many times cheaper. Due to its price, this metal is used in industry in about 50%, but it also has its investment and jewelery significance.

From a fundamental analysis point of view, it is useful to track the amount of silver held by ETFs, as well as the gold/silver price ratio, which shows whether a particular market is overbought or oversold relative to the long-term average. The metal is also dependent on copper as silver is mined together with this raw material. High copper production means new supply in the silver market.

The key companies in the silver market sector are Pan American Silver (PAAS.US) , Fresnillo (FRES.UK) , Polymetal Silver Corp (POLY.UK) , Hecla Mining (HL.US) and KGHM (KGHM.PL) . The most popular ETF that allows you to invest in physical silver is iShares Physical Silver (ISLN.UK) . The leveraged ETF CFD Global X Silver Miners S (SIL.US) is also gaining popularity among speculators .

Coffee (COFFEE)

A very interesting aspect related to coffee is the fact that it is the second most traded commodity in the world after oil. On the other hand, the impact of the coffee trade on global GDP is negligible. Coffee belongs to the group of so-called. soft goods ( soft commodities ) and theoretically too high prices may lead to the search for alternative solutions. However, the final market price of coffee for the consumer depends only 1-2% on the price quoted on world stock exchanges.

Coffee is grown mainly in the countries of South and Central America, Southeast Asia and Africa. There are two types of coffee: Arabica and Robusta . At XTB, we trade CFDs on Arabica coffee , which is definitely more popular and considered to be of higher quality.

In the case of coffee, it is also worth tracking the daily change in stocks, tracked by ICE (International

Commodity Exchange) and WASDE monthly report from USDA or CONAB monthly report from

Brazil regarding production prospects.

Companies that remain sensitive to the coffee market and prices include Starbucks (SBUX.US) and Keurig Dr. Pepper (KDP.US) .

Read next: The Future Outlook Of Commodities Market And How To Trade Them On A Short Position| FXMAG.COM

Oil Is An Indicator Of The Health Of The Global Economy

XTB Team

With almost 20 years experience, XTB is one of the largest stock exchange-listed FX & CFD brokers in the world. We have offices in over 13 countries including UK, Poland, Germany, France and Chile.

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