A commodity is a basic good that is used in commerce and is interchangeable with other goods of the same type. Commodities are typically raw materials, such as metals, agricultural products, and energy sources, that are traded on financial markets.
The price of a commodity is determined by supply and demand forces in the market, and it tends to fluctuate based on a variety of factors, including changes in global demand, production costs, and geopolitical events. Because of their inherent value and wide range of uses, commodities are often considered to be a good store of value and a hedge against inflation.
There are many different types of commodities, including metals such as gold and silver, energy sources such as oil and natural gas, and agricultural products such as corn and wheat. Commodity markets play an important role in the global economy, as they provide a way for producers of raw materials to sell their goods and for consumers to access the materials they need.
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