| There are two main types of commodities: hard and soft. Hard commodities consist of natural resources, such as oil or gold. While soft commodities are agricultural goods or livestock that must be grown and cared for in order to be produced. Both markets trade on supply and demand, and are heavily influenced by macroeconomic events.
Hard commodities are usually the ones that make headlines, or are referred to as a basis for economic health. Because the production and supply of these assets can be predicted fairly accurately, they are used to gauge global-economic health. Copper and oil, in particular, are often looked at to determine where the economy is headed by observing total-worldwide demand for these products..............................................Full Article: Source |