HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
XM information and reviews
XM
82%

Top commodities to watch in 2024: gold, oil, and others


Understanding Commodities

Commodities, ranging from precious metals to energy resources and agricultural products, are the raw materials that power the global economy. Unlike financial assets, their value is largely determined by supply and demand dynamics. ‘In 2024, commodities are playing an essential role in portfolios, particularly as a hedge against inflation and currency devaluation’, explains Octa analyst Kar Yong Ang. This fundamental difference makes commodities a vital tool for diversification, especially during periods of market volatility. Besides, they are seen as more predictable. Considering these two factors, commodities can help you minimise financial risks.

H2: Top Performing Commodities of 2024

Gold continues to stand out as a safe-haven asset, especially amid global uncertainties. The financial turmoil in August 2024 and ongoing geopolitical tensions have significantly increased demand for gold. ‘The reduction in import duties by key markets like India has further boosted retail demand, reinforcing gold's position as a top-performing commodity this year’, notes Kar Yong Ang. Central banks have also been major buyers, with a net purchase of 228 tonnes of gold in Q1 2024 alone, marking a 34% increase compared to the same period in 2023. This surge has driven prices to record highs.

Traders should monitor inflation rates, interest rates and the strength of the American dollar. Since gold is traded in dollars, its price is inversely related to the USD exchange rate. When the dollar weakens, gold becomes cheaper for holders of other currencies, stimulating demand and increasing its price. The same happens if the Federal Reserve (Fed) cuts interest rates, which is the expected scenario according to the current market sentiment. Here’s how lower interest rates affect gold:

Despite recent price drops, oil remains a crucial commodity due to its integral role in the global economy. ‘Geopolitical tensions and OPEC+ production decisions heavily influence the 2024 oil market’, says the expert. The economic slowdown in major economies like China and the U.S. has tempered demand, with global oil demand expected to grow by just 1.2 million barrels per day (mb/d) in 2024, down from a previous forecast of 2.4 mb/d. However, oil remains a vital energy source, and the coming months could see significant price fluctuations, especially if geopolitical tensions escalate or supply disruptions occur. Traders should stay alert to changes in crude oil and petroleum inventory levels in key oil-consuming countries and monitor supply dynamics in major oil-producing countries.

H2: Exotic Commodities to Watch

Besides major commodities, traders can consider less conventional ones like cobalt, lithium, nickel, graphite, hydrogen, carbon credits, or rare earth elements (REE). They are boosted due to global technological changes and a global green agenda. Here’s a breakdown of three emerging commodities to watch:

  1. Lithium’s importance is growing rapidly as the world shifts towards green energy, particularly in the production of electric vehicle (EV) batteries. The global EV market is projected to grow significantly, with EV sales expected to increase by 35% in 2024, driving up the demand for lithium. This makes lithium an interesting alternative for traders, especially as countries continue to invest heavily in renewable energy infrastructure and aim to scale up EV production. The ongoing advancements in battery technology, including the push towards higher energy density and longer battery life, further underscore the importance of lithium in the coming years. However, it's important to note that the futures market for lithium is not sufficiently liquid, making it challenging for traders to gain direct exposure. Most traders can access the lithium market through investments in lithium-producing company stocks or exchange-traded funds (ETFs) focused on this sector.

  2. Nickel is another commodity to watch, primarily due to its essential role in high-energy-density batteries. However, recent fluctuations in nickel prices, which saw a drop of nearly 15% due to increased supply from key producers, highlight the market's volatility. Traders should be cautious of supply constraints and geopolitical risks, particularly as these factors could further impact nickel prices. Monitoring technological advancements in battery production and developments in global supply chains will be crucial as these elements are likely to shape the future demand for nickel. It's important to note that the futures market for nickel is not highly liquid, meaning that most traders seeking exposure to this commodity may need to do so through investments in nickel-producing company stocks or exchange-traded funds (ETFs) that focus on the sector.

  3. Hydrogen is increasingly seen as a cornerstone of the clean energy transition. Governments worldwide are investing heavily in hydrogen infrastructure, positioning it as a key energy carrier for the future. In 2023 alone, global direct investments in hydrogen-related projects reached nearly $16 billion, reflecting a significant commitment to developing this sector. Furthermore, the International Renewable Energy Agency (IRENA) projects that hydrogen could meet up to 12% of global energy demand by 2050, underscoring its potential as a transformative force in the energy market. However, it's important to note that hydrogen is not a traded commodity in the classical sense. There are currently no operational market or futures contracts for hydrogen, making it challenging for traders to gain direct exposure. As the sector evolves, traders will need to explore alternative methods, such as investing in companies involved in hydrogen production and infrastructure, to capitalise on this emerging market.

The commodities market in 2024 will be a critical space for investors looking to navigate the challenges of a volatile global economy. To succeed in this dynamic market, traders need to stay informed about global economic trends, geopolitical developments, and the shifting demand for these vital resources. Moreover, they should practice risk management to protect their funds, especially in times of volatility. To safeguard themselves, traders need to keep learning. To avoid getting distracted, it’s best to access educational sources at a trading platform like Octa, which offers free learning materials, a user-centric trading experience, and the five most popular commodities to trade, including gold and oil. This facilitates improved concentration, hence increasing the chances of successful trades.

Octa is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services already utilised by clients from 180 countries who have opened more than 42 million trading accounts. The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities. Octa has also won more than 70 awards since its foundation, including the 'Best Educational Broker 2023' award from Global Forex Awards and the 'Best Global Broker Asia 2022' award from International Business Magazine.


RELATED

Guide to Account Security: Safeguarding Against and Addressing Scams

At forex-ratings.com, your security is of paramount importance to us. Our mission is to offer you a digital environment where you can invest, trade, and communicate confidently...

A Guide to Demo Trading Accounts

Embarking on your trading journey is akin to stepping into a vast, dynamic universe with its own set of rules. Whether you aim to explore the realms of forex, delve into precious metals...

Intraday Trading: The Complete Guide

The advent of online trading available to anyone with a smartphone or tablet has opened up financial markets like never before. Modern technology, 24-hour news, and minimum...

Beginner's Guide to Forex Trading with FXTM

If you're new to the world of forex trading and looking to embark on your trading journey, you've come to the right place. Forex trading can seem complex at first, but with the right guidance...

Beginner's Guide to Share CFDs Trading

Prospective traders can't run out of trading options due to the avalanche of investment opportunities in the trading market. In addition to trading Forex and cryptocurrency...

The Past, Present and Future of Trading Success

Let's have a look at some basic needs to find out our story. Let your mind go back to the past, remember that first day when you decided to make your first trade...

Forex vs. CFD: Which One is Better?

Probably, every trader has faced the abbreviation CFD. But if you ask what this means, in most cases, the answer is: it's something similar to Forex, only for stocks...

History of derivatives. Part 1. What are financial instruments?

You’ve been hearing about trading instruments here and there. This article will briefly introduce you to derivatives, forwards, and futures. Get comfortable and enjoy interesting information...

The future of cryptocurrencies

Examine the recent events in the cryptocurrency market and find out if cryptocurrencies are the unicorn of the 21-st century or the money of the future. When the world heard about...

Forex Trading - The Actual Financial Solution

Forex trading has proven to be a steady source of income for many traders across the globe. The amazing statistics in 50+ Forex & Trading Industry Statistics...

What You Need To Know Before Trading CFD

A Contract for difference offers investors and traders diverse opportunities to profit in the market from the price movement of assets without owning the asset...

What Affects Forex Rates?

Currency exchange rates have always been a considerable factor used to determine a country's economic health and stability. This is typically defined as the rate at which one...

How to Trade Online with AvaTrade?

If you are just starting out in the world of online trading, it may feel a bit daunting, But have no fear as AvaTrade are here to support you every step of the way. With us, you will learn...

How to Trade During the US Presidential Election?

Unless you've been hiding under a rock for the past year, you've probably heard, read, or participated in some heated discussions about the US presidential race...

How to become a Forex trader

While Forex is an exciting and lucrative financial market, many traders face difficulties when trying to make steady profits and grow...

What Financial Markets Are and Why They are Important

When we talk about stocks, currencies, bonds and cryptocurrencies, we may not think that all of these assets relate to particular financial markets. And what is a financial market, anyway?

What is a Good Profit Margin in Trading?

Profit margin measures the earnings relative to the revenue. The three main margin metrics are gross profit margin, operating profit margin, and net profit margin...

Guide To Choosing A Broker In 2023

Choosing a reliable broker is an important step in the career of a successful trader. It is the broker, being the intermediary between you and the market...

What Is the OTC Market?

Over-The-Counter markets are popular among investors and traders. This term is mostly associated with the trading of company shares. Yet, it's possible...

Why Trade Indices

Indices trading describes the buying and selling of a specific stock market index. An index shows the performance of a group of stocks. When the price of a group of stocks go up...

FP Markets information and reviews
FP Markets
81%
RoboForex information and reviews
RoboForex
77%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.