Metals and energy, priced by supply and demand.
Gold, silver and the industrial metals alongside crude and natural gas. These markets price something that has to be dug up or drilled, stored, shipped and then used, and that physical chain is what makes them move unlike anything else in the account.
Precious metals, industrial metals and energy, grouped the way the market groups them. What is tradable, and what it costs, is set out in the platform rather than on this page.
- Precious metals
- Industrial metals
- Energy
Where the price comes from
A commodity has no earnings and no central bank. It has producers, buyers, storage and a route to market, and the price is whatever settles the argument between them.
Two families under one heading
Metals and energy share a menu and behave nothing alike. Even inside metals, the ones people hold and the ones industry consumes answer different questions. Treating commodities as a single market is the first mistake.
The price settles a physical balance
Somebody produced it, somebody has to store it, somebody eventually burns or builds with it. When production, storage and consumption stop matching, the price is what moves until they match again.
Produced in few places, used everywhere
Output is concentrated in a handful of regions and most of it travels by ship or pipeline. A production decision or a blocked route in one place is repriced in every time zone the same day.
Not a share, not a currency
A share has earnings behind it and a currency has a central bank. A commodity has a warehouse, a shipping schedule and a contract with an end date, so the checks you brought from other markets do not transfer cleanly.
How a commodity book is grouped
Names only. There are no prices, quotes or costs on this page, and the platform's instrument list is what decides what you can trade.
Precious metals
Bought partly to hold rather than to consume, so they respond to what money and confidence are doing as much as to industrial need. Silver has a foot in both camps, which is part of why it moves more sharply than gold.
- Gold
- Silver
- Platinum
- Palladium
Industrial metals
Inputs, not stores of value. These track construction, manufacturing and the build-out of the electricity grid, which makes them a reading on growth rather than on caution.
- Copper
- Aluminium
- Zinc
- Nickel
- Lead
- Tin
Energy
Consumed about as fast as it is produced, and awkward to store. Weather, production policy, refining capacity and the state of storage do most of the work here, and they can all change in a week.
- Brent crude
- WTI crude
- Natural gas
- Heating oil
- Gasoline
The shape of a commodity market
None of this is a strategy. It is the mechanical behaviour of these markets, and it is the part that catches traders arriving from currencies or shares.
- 01
Supply is physical and slow
A mine or a well cannot be turned up to suit today's price. New supply takes years of capital spending, and stopping existing supply is expensive enough that producers often keep going through weak prices. Demand can turn in a quarter; supply cannot. The gap between those two speeds is where the large moves come from.
- 02
Inventories are the running score
What is sitting in warehouses, tanks and storage is how the market checks whether it is short or comfortable. Traders read the direction of those stocks against what was expected rather than the level on its own, and the reports arrive on a published schedule. Prices can gap through one, so a stop is an instruction to exit, not a guaranteed exit price.
- 03
Geopolitics is priced before it happens
Production policy, sanctions, and trouble near a shipping lane or a pipeline all put a risk premium into energy long before anything is actually interrupted. That premium can appear overnight and be handed back just as quickly once the risk fades, which means a position can lose money on news that nothing happened.
- 04
The dollar sits on the other side
Most of this is quoted in dollars, so a stronger dollar makes the same commodity dearer everywhere else and tends to weigh on both demand and price. A long metals position quietly carries a dollar view with it, whether or not you wanted one.
- 05
The calendar has seasons in it
Heating demand, the driving season, harvests, construction schedules and refinery maintenance all repeat. Seasonality is a tendency rather than a rule, and an unusual winter or a supply outage will override it, but it is a pattern the rest of the market is watching, so being surprised by it is avoidable.
- 06
Contracts expire, so positions roll
A commodity price is quoted from a contract for delivery in a particular month, and that contract eventually stops trading. Staying exposed means moving into the next month, which is what rolling means. The two months rarely cost the same: if the later one is dearer, staying in the market costs you something; if it is cheaper, it works in your favour. A position can be right about direction and still drift because of the roll, so check how expiry is handled on an instrument before you hold it through one.
Before your first commodity trade
If your question is not covered here, ask us before you place the trade rather than after.
Contact usWill I ever end up with the physical commodity?
Not through a trading account like this one. What you hold is a position on the price, not an arrangement to receive a cargo of crude or a pallet of copper. What you do have to watch is the contract behind the quote, because it has an end date and the position has to be rolled or closed before it arrives.
What does rolling a contract actually mean?
The quote you trade comes from a contract for a specific delivery month. When that month stops trading, keeping the exposure means moving into the following one. Because the two months are priced separately, the move itself has a cost or a credit attached, depending on which is dearer. It is the mechanic that surprises people arriving from currencies, where nothing expires.
Why do gold and copper not move together?
They are bought for different reasons. Gold is largely held rather than consumed, so it responds to what is happening to money and to confidence. Copper is an input into building things, so it responds to how much building is going on. The same news can push them in opposite directions.
What should I be watching on crude?
Production policy from the large exporters, the direction of inventories against expectations, refining capacity, and anything that threatens a shipping route. Underneath all of it sits demand, which follows the state of the wider economy. Much of this arrives on a scheduled calendar rather than out of nowhere.
Does the dollar matter if I am only trading metals?
Yes. The metal is priced in dollars, so a move in the dollar changes what it costs everyone paying in another currency. That feeds into demand and back into the price, which is why a metals position and a dollar position often end up looking like the same trade.
Why is natural gas livelier than the rest?
It is expensive and awkward to store, and demand for it swings with the weather. Regional supply cannot always reach regional demand, so a cold snap or an outage has nowhere to go but into the price. Size a gas position for that, not for how a metal behaves.
The rest of the account
One balance and one set of margin rules sit behind all four, so moving between them does not mean moving money.
Know what moves it before you size it
If you can name what is driving the instrument this week, and what the contract behind it does at expiry, you have enough to size the position properly. Open the account when that is true.