How Global Events Reshape Commodities Trading Equilibrium?| Espresso

How Global Events Reshape Commodities Trading Equilibrium?

Commodities are one of the most preferred trading assets of traders and investors worldwide. It provides them with trading opportunities to implement their trading strategies without additional trouble. Placing the stakes in this market makes things more efficient for traders and investors, leading them to lucrative outcomes. Traders need to be vigilant while they place their trades in this market to avoid market misgivings. 

Published on 11 March 2024

When speculating on the aspects of the commodities markets, traders need to pay additional care to several factors. Unlike other markets, which are only influenced by corporate actions or crowd behaviors, several things cast an impression on the commodities trading experience. Through the following passages, we will fathom an understanding of the commodities markets and several global factors that have the potential to make a dent. 

Commodities - Holistic Understanding

Commodities are instruments of general use and include materials like gold, silver, diamond, agricultural products, and more. Hence, these are utterly or at least partly fungible financial instruments. When trading in this market, traders and investors may employ bullish or bearish trading strategies, allowing them to benefit from forward or backward price leaps. Additionally, depending on the commodity, traders need to buy the specified quantity to orchestrate their intraday or delivery trading maneuvers in this market. 

Like other markets, turmoils are quite common in commodities, and traders need to make sensible speculation to map the navigational current. However, there are multiple external factors traders and investors must take into account before they place their trades in this market. Negligence to do the same causes traders to face financial catastrophe and demines the trading experience. Traders placing their trades directly in commodities or using commodities as an underlying instrument for derivative trading must conduct extensive due diligence. 

Events Affecting the Commodities

Several internal and external factors may cause a seismic shift in respective commodities. The following are some of the factors with the potential to ripple through the commodities market:-

Demand and Supply

When using your commodities trading app to orchestrate your market maneuvers, you need to navigate the financial currents. Like any other market, end-user behavior may start an uptrend or downtrend or leave the market unaffected. Yes, the demand represents a willingness to buy and represents bullish sentiments. On the other hand, supply represents a bearish sentiment, representing the willingness to sell. Uptrends or downtrends start when the curve shifts away from the equilibrium point. 


Volatility in the market causes extreme price changes and over-the-top oscillations. It affects the crowd's sentiment and causes them to behave accordingly. The behavior of traders is poised to deliver a seismic shift and cause commodity prices to appreciate or depreciate. 

New Introductions and Discoveries

New introductions and discoveries increase the demand for the associated commodities with scaled-up industrial requirements. Today, the demand for AI is consistently taking a forward leap. Hence, will likely appreciate the value of the associated commodities due to ramped-up industrial endeavors. When we talk about the upliftment of AI, the price of rare earth elements like neodymium, dysprosium, and terbium will increase due to their applicability in building AI hardware and equipment. Additionally, the prices of semiconductors and graphite will go through a monumental stride. 

Corporate Endeavours

Corporate endeavors to turn several commodities into useful commercial products have the potential to increase their prices to a higher degree. With the flourishing requirement for a commodity, the adjacent enterprises too get more involved in orchestrating their market maneuvers, making the commodity more pricey than its relative value. On the other hand, the negligence of the corporations towards a commodity proliferates its abundance, causing a significant depreciation. 

Influence of Government and Regulatory Bodies

Several factors and policies made by the government tend to affect commodity prices. Taxes, government policies, the behavior of regulatory bodies, and more cause the masses to act accordingly. With the same, there are huge chances of appreciation and depreciation of the price. Hence, traders must take the same into account while they place their trades with the commodities trading corporation app. With the same, they can create sensible speculation of things that may or may not happen in the market. Traders and investors can have lucrative outcomes and avoid market misgivings with it. 

Concluding Remarks

With agricultural commodities trading companies' app, traders and investors can orchestrate their market vistas in several commodities. Traders and investors may have lucrative outcomes with the same, but they need to fathom the market outcomes by going through the myriad aspects that may hold the key to unlocking a paradigm shift. 

Chandresh Khona
Chandresh Khona

Product Offerings Head

A teacher, writer, travel buff and now Espresso's Product Offerings Head. Ten years here has allowed me to lead the digital team at Sharekhan. My true passion lies in stock market charts.