Factors affecting the commodity markets

01:17 Mins Read

What affects the prices of commodities in the commodity market? Turns out, a great many factors.

Transcript

Factors affecting the commodity markets Just like other financial markets, the commodity markets are also influenced by a number of factors. Among these, the most basic set of drivers are the demand and supply forces. For instance, as the demand for a commodity like oil rises, its price also increases. Conversely, if the supply of oil rises, its price falls instead. Seasonal and weather patterns also affect the commodity markets – particularly the agricultural segment. For example, in the case of seasonal crops, in the out-of-season months, the supply may dwindle Causing the price of the commodities to rise. Aside from these metrics, the economic policies of a country Its economic growth And its geopolitical concerns also impact the commodity markets. See how so many factors are important? That’s why adequate research and learning are very important. Well, with this, our module on currencies and commodities comes to an end. See you in the next module of Smart Money