Types of commodities

Commodities can generally be divided into three main categories: metals, energy, and agricultural.

Here’s a look at each of these categories.

Metals

Metal commodities are commonly used in manufacturing and construction. Some metals, such as gold and silver, are also used in jewellery and for investment purposes.

Examples of metal commodities include:

• Gold
• Silver
• Platinum
• Copper
• Nickel
• Aluminum
• Palladium
• Energy

Energy commodities

Energy commodities play a crucial role in keeping the global economy ticking over. Without energy, we would be unable to transport people and goods across the world, power factories, or heat our homes.

Examples of energy commodities include:

• Oil
• Natural Gas
• Agricultural

Agricultural commodities

Agricultural commodities are crops and animals that are grown or raised on farmland. Most agricultural commodities are used to produce food, however, some have industrial uses.

Examples of agricultural commodities include:

• Sugar
• Cotton
• Cocoa
• Wheat

Hard vs soft commodities

Commodities are also often classified as either ‘hard’ or ‘soft’ commodities.

Hard commodities are generally natural resources that are mined or extracted out of the ground.

Examples include gold, copper, and oil.

Soft commodities are typically agricultural products or livestock that are grown or raised on a farm.

Examples include sugar, cotton, and wheat.

Reprinted from eToro, the copyright all reserved by the original author.