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What are Commodities? Commodities are goods that have a universal price around the world. Gold, for example, has the same price per ounce in Brazil and.

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Presentation on theme: "What are Commodities? Commodities are goods that have a universal price around the world. Gold, for example, has the same price per ounce in Brazil and."— Presentation transcript:

1 What are Commodities? Commodities are goods that have a universal price around the world. Gold, for example, has the same price per ounce in Brazil and Bombay A commodity can be refined from a raw element, as oil is refined from petroleum. A commodity can also be mined directly from the Earth, such as a metal, or it can also be an agricultural product 1

2 Why invest in Commodities Because they are not based on the profits or business strategies of any one company or nation Varied asset allocation allows an individual to spread out their financial portfolio Commodities being in short supply and increasing demand for commodities all across the globe especially from countries like India and China There are commodities indexes, commodities exchanges, and numerous types of contracts and buying options which allow a savvy financial investor to make considerable amounts of money 2

3 Risks Associated with Commodities 3

4 Factors Influencing Commodity Prices Economics: Demand and Supply eg Oil, Corn Dollar: Tracked through the dollar index Price of Oil Speculation????? Economic Cycles Stock Markets 4

5 Various Heads of Commodities Energy Precious Metals 5 CommodityMajor Exchange Traded Brent, WTI Crude OilNYMEX Natural GasNYMEX Coal (API2)NYMEX EmissionsEuropean Climate Exchange CommodityMajor Exchange Traded GoldCOMEX SilverCOMEX PlatinumNYMEX

6 Various Heads of Commodities Industrial Metals Agriculture 6 CommodityMajor Exchange Traded CopperNYMEX AluminiumNYMEX TinLondon Metal Exchange ZincLondon Metal Exchange CommodityMajor Exchange Traded CoffeeICE(NYBOT) SugarICE(NYBOT) CornCBOT WheatCBOT SoyabeansCBOT

7 Commodity Indices S&P Goldman Sachs Commodity Index Reuters/Jefferies CRB index UBS Bloomberg Constant Maturity Commodity Index Rogers International Commodity Index 7

8 Major Commodity Exchanges Chicago Board of Trade (CBOT) CME (Chicago Mercantile Exchange) NYBOT (New York Board of Trade) NYMEX: New York Mercantile Exchange COMEX: Commodities Exchange London Metals Exchange LIFFE Inter Continental Exchange(ICE) Dalian Commodity Exchange NCDEX MCX 8


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