What they are
Commodities are raw materials: energy such as oil and gas, metals such as gold, silver and copper, and agricultural goods such as wheat and coffee.
Gold and silver
Gold has been a store of value for thousands of years. Investors often buy it as protection during inflation, currency weakness or market stress. Silver has both investment and industrial demand.
What moves them
- Supply and demand, including weather and production decisions.
- The strength of the US dollar.
- Global growth, especially industrial demand from large economies.
- Geopolitical events.
Risks
Commodities pay no interest or dividends, and prices can be volatile. They work best as a supporting part of a diversified plan.
Key takeaways
- Commodities are raw materials like oil and gold.
- Gold is often used as a safe haven.
- They produce no income, so returns depend on price alone.
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This lesson is general education and not personal financial, tax or legal advice. Investing involves risk, including loss of principal.