Metals, energy, and agriculture

Commodities are the raw materials of the global economy — the metal in your phone, the fuel in your car, the wheat in your bread. Unlike currencies or shares, their prices are shaped by physical realities: mines, pipelines, harvests, warehouses, and weather. That makes them some of the most rewarding markets to understand, and some of the most dangerous to trade without that understanding. This lesson maps out the commodity world before the next module zooms in on the one most traders start with: gold.

What you'll learn

• The three commodity families and what drives each
• The difference between precious and industrial metals
• Crude oil benchmarks and the weekly energy reports that move them
• Why weather and seasons dominate agricultural markets
• How retail traders access commodities — and the costs that come with each route

1. The three families

Most commodities are priced in US dollars, so a stronger dollar often puts some downward pressure across the whole complex — one of several links back to what you learned in the Forex track.

2. Metals

Precious metals

• Gold — held as a store of value and safe haven, bought by central banks and investors, and used in jewellery. It behaves more like a macro asset than an industrial one. (Module CM.2 is dedicated to it.)
• Silver — part precious metal, part industrial metal: electronics and solar panels are major sources of demand. It often moves with gold, but with bigger swings.
• Platinum and palladium — heavily tied to industrial uses such as vehicle catalytic converters.

Industrial (base) metals

• Copper — used across construction, electrical grids, and manufacturing. Because demand is so closely linked to economic activity, copper is often watched as a signal of global growth — nicknamed "Dr. Copper".
• Aluminium, nickel, zinc — driven by construction, manufacturing, and battery demand, and by supply from a small number of producing countries.

3. Energy

Crude oil

Two benchmarks dominate:

They usually move together, with a price difference (the spread) reflecting quality and transport.

What moves oil

• Supply decisions, especially by OPEC+ (OPEC members plus allies such as Russia)
• Inventories — how much oil is in storage relative to normal
• Global demand, tied to economic growth and travel
• Geopolitics — conflicts or sanctions affecting producing regions or shipping routes

Key scheduled reports (US)

• EIA Weekly Petroleum Status Report — usually Wednesdays at 10:30 a.m. New York time; shows changes in US crude and fuel inventories
• EIA natural gas storage report — usually Thursdays at 10:30 a.m. New York time

As with economic data, the market reacts to the surprise: a larger-than-expected inventory build typically weighs on prices; a larger-than-expected draw tends to support them.

Natural gas

Much more regional and weather-sensitive than oil. Cold winters and hot summers (heating and air-conditioning demand) can cause very large price swings.

4. Agriculture

Agricultural commodities are driven by nature and the calendar:

• Weather — droughts, floods, frosts, and monsoon strength can transform expected harvests.
• Seasonality — planting and harvest cycles create recurring patterns of uncertainty.
• Government reports — in the US, the USDA's monthly WASDE (World Agricultural Supply and Demand Estimates) report is a major scheduled event for grains.
• Trade policy and disease — export bans, tariffs, and crop or livestock disease.

Agricultural contracts can be less liquid than gold or oil, with wider spreads and sharp moves on report days. Most traders gain experience with metals and energy first.

5. How retail traders access commodities

Common beginner mistakes

• Treating every commodity like a forex pair without checking contract size and value per move.
• Trading oil into the weekly inventory report without knowing it's scheduled.
• Ignoring rollover on futures-based CFDs and being surprised by a price or balance adjustment.
• Jumping into thin agricultural markets before building experience in liquid ones.
• Forgetting the dollar — a strong USD can weigh on commodities regardless of their own fundamentals.

Key terms

Practice

1. On your platform, find the contract specifications for XAU/USD, XAG/USD (silver), and a crude oil CFD. Record the contract size and the value of a $1 move per lot for each.
2. Mark the next EIA petroleum report on your economic calendar, in your time zone.
3. Compare a D1 chart of gold and copper over the last three months. When did they move together, and when did they diverge?
4. Check whether your broker's oil CFD has scheduled rollover dates, and how they're handled.

Quick recap

• Commodities fall into metals, energy, and agriculture, each with distinct drivers.
• Gold behaves like a macro asset; copper is a barometer of global growth; silver sits between the two.
• Oil is driven by supply decisions, inventories, demand, and geopolitics — watch the weekly EIA report.
• Agriculture is dominated by weather, seasons, and government reports.
• Always read the contract specification — commodities vary widely in size, hours, and costs.