How To Invest In Commodities: 5 Simple Strategies

Prospective traders had far fewer options to invest in commodities before online trading took the stage.

Today, you can speculate on commodity price movements with or without actually owning the asset.

5 Simple Strategies

1 – Buy Precious Metals Through Bullion Dealers Most countries have bullion dealers, both brick-and-mortar and online shops. They allow you to buy or sell metals like gold, silver, platinum, and palladium. Some offer other commodities as bullion, too, like copper and rhodium.

2 – Buy Stocks or ETF Perhaps the most indirect way to trade commodities is through company stocks. For example, there are dozens of mining companies that specialize in industrial metals.

3 – Mutual Fund A mutual fund consists of a brokerage combining investments from multiple sources to allocate to a particular group of assets. Much like we just discussed with ETFs, mutual fund prices are determined by multiple investment products

4 – Invest in Futures & Options Contracts The majority of popular commodities are accessible on national and international exchanges. Typically, futures contracts are available precious metals, common metals, soft agricultural commodities, and energy commodities.

A CFD is an agreement between you and a third party, typically a broker, where the buyer or seller pays the difference between the contract opening and closing price to the opposing party.

5 – Contracts for Difference (CFDs)

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