Commodities, Bonds and Indices Trading

  • Commodities are raw materials used for manufacturing or processing processes. Hard commodities tend to be mined or extracted resources such as gold, copper and oil, while soft commodities tend to be grown resources such as wheat, wool, coffee and soybeans.
  • Bonds are a type of ‘loan note’ provided by governments or equities in return for investors’ capital, providing the promise of future returns for those investors. Bond prices and their availability both tend to be closely linked with interest rates and interest rate changes.
  • Indices provide a representative price for a group of shares that share an industry, exchange, location or other common class. Traders can invest in either the indices themselves, or use CFDs to speculate on the volatility and price of index values.

Gold

The price of gold typically has an inverse relationship to the US dollar, with gold prices rising as the dollar weakens and vice versa. Demand factors including the jewellery and electronics industries also play a role.

Wheat

A variety of factors can affect the price of wheat futures, including weather events, economic stability and growth, inflation and influences affecting output from major producers including China, India and the US.

Brent oil

Brent oil represents around two-thirds of the world’s internationally traded crude oil supplies, and can be influenced by geopolitical, economic and environmental factors, WTI crude oil prices and OPEC supplies.

ASX 200

The ASX 200 index is a market-capitalisation weighted index of the 200 largest companies listed on the Australian Securities Exchange, with much representation taken up by the Financials and Materials sectors.

Dow Jones

One of the three major indices of the US market, the Dow Jones is price-weighted and reflects 30 significant stocks traded on NYSE and NASDAQ. It can be a good general indicator for the health of the US economy.