Metals commodities include gold, silver, platinum, and copper. During periods of market volatility or bear markets, some investors may decide to invest in precious metals–particularly gold–because of its status as a reliable, dependable metal with real, conveyable value.
Investors may also decide to invest in precious metals as a hedge against periods of high inflation or currency devaluation.
Energy commodities include crude oil, heating oil, natural gas, and gasoline.
Global economic developments and reduced oil outputs from established oil wells around the world have historically led to rising oil prices, as demand for energy-related products has gone up at the same time that oil supplies have dwindled.
Agricultural commodities include corn, soybeans, wheat, rice, cocoa, coffee, cotton, and sugar.
In the agricultural sector, grains can be very volatile during the summer months or during any period of weather-related transitions.
For investors interested in the agricultural sector, population growth–combined with limited agricultural supply–can provide opportunities for profiting from rising agricultural commodity prices.
US Cotton No.2