Commodities Trading

What is commodities trading?


The trading of commodities includes a vast array of products that are mainly traded on global futures exchanges. The world economy is dependant on various commodities to varying degrees. Complex factors drive the supply and demand for energy, metals, and agricultural commodities. This can lead to large price swings as markets attempt to find the price at which supply and demand are balanced.

For traders there are opportunities to trade commodities across all time frames, from minutes to years. Commodity prices tend to establish persistent trends that can last from 5 to 10 years. However, supply and demand can be influenced by weather, geo-political factors, inflation, interest rates, consumer spending and economic conditions. This means new trading opportunities can arise at any time.

EightCap Commodities Trading

EightCap trader’s can access four commodity instruments via their MetaTrader 4 & 5 platforms.

CommoditiesTrading SymbolTrading Hours (Server Time)
Brent Crude OilUKOUSD01:00 - 24:00
West Texas Intermediate Crude OilUSOUSD01:00 - 24:00
SilverXAGUSD01:00 - 23:59
GoldXAUUSD01:01 - 23:59

Trading Oil: Brent vs. WTI

The oil market is diverse with various prices quoted for crude oil depending on the location, quality and properties. The most commonly traded oil contracts are Brent (Brent Sweet Light Crude) and WTI (West Texas Intermediate), which are the two global benchmarks for oil trading – very few traders look at any other oil prices.

Brent crude is extracted from the North Sea, while WTI is extracted in North America. WTI is a better product for producing diesel fuel, while Brent is superior for producing gasoline. However, there are other factors that determine the prices of the two benchmarks. Oil costs money to transport, so the location of demand is an important factor, as is the amount of production, and the availability of storage facilities.

For many years the prices of the two were only a few dollars apart, however, over the last decade, Brent has surged ahead and now trades $5-$10 higher than WTI.

Trading Brent Oil

EightCap offers Brent Oil CFDs, one of the easiest ways to trade the oil market. Brent Crude Oil is fast becoming the global benchmark, and as such its price is influenced by anything affecting the global oil industry. Learning about the factors that affect the prices of Brent Crude Oil are critical to ensure you can develop an effective trading strategy.

Trading WTI Oil

You can also trade WTI Oil CFDs with EightCap. WTI Oil offers traders opportunities to trade on the long and short side as global events impact the price. Learning about the recent price history of WTI Oil and its influencing factors allows traders to make informed decisions when taking a position.

Trading Metals: Gold vs. Silver

Gold and Silver offer traders opportunities to profit from both increasing risk aversion in global markets, and speculation around inflation. Both are real assets, with limited supply, meaning they offer a real store of value during times of uncertainty and inflation.

Many of the factors that influence the price of Gold and Silver are the same, however there are also a few differences. Precious metal prices are influenced by investor appetite for risky assets (including bonds, stocks and commodities), geo-political events, expected inflation and interest rates and the strength of the US Dollar. The dynamics of the mining industry also influence prices.

However, while all the Gold that has been mined still exists, Silver is actually used in industrial processes. It was used in the past for photography and printing, and is now used by the solar power industry. This means the total supply of Silver is gradually falling, which may provide an underpin to the price.

Trading Gold

EightCap offers Gold CFDs, one of the easiest ways to trade the Gold market. Factors and events that affect the price of gold should be considered before taking a position in the market.

Trading Silver

You can also trade Silver CFDs with EightCap. Again, factors and trends that shape the Silver market including it’s recent price history should be considered before taking a position in market.

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