The commodity market in q1 2021 has particularly seen some buying pressure relatively on reports revealing COVID caseloads are being subdued coupled with the $1.9 trillion stimulus deal boosting investors’ appetite for riskier assets, higher after the worst pandemic known to man disrupted financial markets at an unprecedented level.
The commodity market is made up of primary commodities like crude oil, cocoa, coffee, corn, hog, gold, silver, platinum, and so on, that trade on major global exchanges found in the United States, United Kingdom, and other major financial centers.
Platinum – 8.13%
The precious grey metal has seen high buying pressure of late due to strong demand from the automotive, jewelry, and industrial demand, offsetting reduced yet very strong investment demand.
Investors are also keying on the metal on macros that reveal light-duty vehicle production is expected to recover this year reaching levels just below those seen in 2019.
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Tin – 7.86%
The industrial metal is facing one of the biggest supply squeeze in the history of metals markets as remote working drives a spike in demand amid plunging supplies
Demand for tin, used in soldering, electronics has surged amid booming sales of smartphones, TV, and other stays-at-home appliances used in the work-from-home era.
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Orange Juice – 4.45%
The agro-based derivative has of late recorded impressive gains on reports key producing areas are witnessing some damage on a significant number of orange trees around Texas and northern Mexico in the wake of the recent hard freeze.
Also driving the price of the orange-colored agro derivative are speculators that appear to be the best buyers at the moment on increasingly bullish chart formations sighted on its most recent price actions
Gasoline RBOB – 4.41%
The price of the fossil-backed derivative remains strong as the world’s largest economy gasoline inventories plunged for a second week in the week ended March 5, Energy Information Administration data revealed March 10, as rising demand stressed winter-storm weakened production.
Spot Silver – 3.61%
The demand for precious and industrial metal still remains strong amid rising U.S yields. Demand for shiny industrial metal is expected to hit an8 year high of 1.025 billion ounces in 2021, according to the Silver Institute. A recovery in industry use of the metal – in medicine, water purification, semiconductors, solar panels, batteries, among other applications – is expected to lift demand.
Copper – 2.99%
Industrial metal in the past few days advanced on major commodity exchanges in hopes of rising demand. Metal pundits are anticipating copper prices might likely surge to an all-time high over the next 12 months as a result of strong demand from China’s clean energy drive and years of under-investment in global mine supply.
Data Source:investing.com, data accumulated at about 6.30 am West African time in real-time.
Common ways to invest in Commodities
Using commodity futures; These are agreements to sell or buy a given amount of commodity at a particular price and specified date in the future. They can be traded online through a broker that connects to commodity exchange.
Using CFDs; A contract for difference (CFD) is a derivative asset, where there is an agreement (usually between a broker and a commodity trader) to pay the differential in the commodity price of an underlying asset between the beginning and end of that contract.
Using the Physical method; The most popular way of commodity investing would be purchasing the commodity itself. Commodities such as cocoa, gold can easily be traded physically, unlike crude oil, natural gas that requires a significant amount of infrastructure.