Raw materials are raw materials that are extracted from the Earth. There are numerous commodities that are traded on the open markets and through forex brokers as well as retail brokerage firms. There are numerous examples of commodities that are; crude oil, coffee, metals, agriculture, wheat, soybeans, corn, copper and cotton. Commodities generally meet the following criteria; they are negotiable, deliverable and liquid. The most traded commodities are metals, crude oil and coffee. Commodity prices can change in the blink of an eye. According to several commodity analysts, specific commodities are believed to be correcting.

In addition to crude oil and coffee, one of the most traded commodities in the world is metals. This commodity group consists of items such as; gold, silver, platinum and copper. Metals are used in all industries, from construction, machine manufacturing, and consumer goods. Also, many metals are found as components of jewelry. Metal commodities are traded on exchanges such as the London Metal Exchange, COMEX, and NYMEX.

Commodity prices tend to be cyclical. Over the last 15 years, many investors have taken advantage of the benefits of investing in commodities as a strategy to diversify their portfolios. There are currently more than 135 commodity ETFs, offering investors and traders exposure to numerous commodities, including metals, grains, oil, coffee and sugar. An important factor that affects the volatility of raw materials is the price of these products throughout economic cycles.

One of the biggest questions investors and traders need to ask themselves is whether commodity prices have peaked. Beginning in 2000, which some consider to be the great commodity supercycle, investors were more than happy to take risks on commodity prices. Before the financial crisis of 2008, the prices of raw materials had great benefits for investors and speculators. There is evidence to show that these large increases in commodity prices (according to the World Bank) will not accelerate as they have in the past, but should instead remain static until about 2020.

One of the most abundant metals traded is gold. Like any commodity, gold is subject to the laws of supply and demand. Gold prices in general are far from their 2011 highs, when an ounce of gold was trading at $1,900. In general, the prices of the US dollar and gold go hand in hand. In 2011, the US dollar was not as strong as it is today. In 2011, when the US dollar was weaker, investing in gold was considered a hedge against inflation.

At the time of the financial crisis, investors and traders believed that gold would continue to rise due to the devaluation of the US dollar by the FED. Investors and traders who thought gold prices would hold steady from their highs are now feeling the pain of investing in the metal.

Once again, it is important to note that gold prices are subject to the laws of supply and demand. Today, the demand for gold is low, which pushes the price of the metal down. In 2011, investors and speculators believed that gold was a sure thing and the demand drove prices up.

Although gold prices are nowhere near what they have been for the past few years, 2016 has surprised some investors and speculators that the metal has outperformed numerous asset classes. Gold ETF prices have skyrocketed during the last few months of 2016. The growth rate has far exceeded that of 2015.

There is a lot of speculation about gold prices and where they will potentially go in the coming months. There are those who believe that the price of gold will fall below 350 dollars an ounce. These price levels in gold have not been seen since 2003. Although these price levels appear completely off the chart, there is reason to believe that when reviewing historical gold prices, the current price near $1,250 is high. If the dollar remains strong and inflation remains under control, the drop in gold prices along with other precious metals could be significant. If a metal like gold falls in prices not seen since 2003, this would be equivalent to a drop of approximately eighty percent from gold prices at their peak in 2011. This type of sell-off would be catastrophic for many investors and traders. that are long in gold.

Inflation rates within the United States have been controlled and are relatively low. In the past, gold and other precious metals have been excellent hedges against inflation rates. When the cost of living rises, due to rising inflation (measured by the consumer price index), investors and traders alike flock to gold. Currently, the constant rate of inflation, coupled with the strength of the dollar, has kept gold prices in check.

In closing, commodity markets can be very volatile and active traders looking to make money in this market should keep an eye on commodity prices as well as news and events around the world. Inflation plays an important role in the buying and selling of precious metals and investors, as well as traders, should also carefully monitor economies around the world to determine the rate of inflation within these countries. Today, the most popular marketed products are; crude oil, coffee, metals, agriculture, wheat, soybeans, corn, copper and cotton. Institutions as well as individual traders and investors who trade metals do so on exchanges such as; Comex, Globex, US Gold, Australian Stocks

Exchange, Chinese Gold and Silver Exchange and Shanghai Benchmark. Once again, precious metals such as gold, silver, platinum and copper are some of the most widely traded commodities around the world. By working with a Forex broker, the Forex trader will have the ability to view the prices of various commodities such as copper, gold and silver prices in real time and will have the option to trade these commodities.