A commodity is a basic product used to make other products or to generate energy. Examples include oil, gold, silver, wheat and copper. Commodities form the foundation of many economic activities and are traded worldwide. 

Commodities often play a special role during periods of economic or financial uncertainty. 

The price of a commodity is determined by global supply and demand. When economies grow and companies produce more, demand for commodities such as oil and copper increases, which can drive prices higher. During economic downturns, demand may decline and prices can fall. Some commodities, such as gold, often become more popular in uncertain times.

Investors often view gold as a safe haven during financial problems, high inflation or geopolitical tensions. As a result, demand for certain commodities can rise in periods when stock markets are under pressure. Commodities can therefore both move in line with economic growth and serve as protection against uncertainty.

Short example:

Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult a professional advisor when making financial decisions. The information and tips provided on this website are based on the personal insights and experience of our analysts and are intended for educational purposes only.