Commodities Trading for Beginners: Oil, Gold and More

Commodities Trading

How to trade commodities: futures, ETFs and producer stocks, what moves oil, gold and grains, key reports to watch, costs and the risks of commodity trading.

Beginner3 min readUpdated 3 Oct 2026

Lesson 37 of 41

Commodities trading means speculating on the prices of raw materials: energy like crude oil and natural gas, metals like gold and copper, and agricultural products like corn, wheat and coffee. Commodities often trend strongly because they respond to physical supply and demand, weather and global growth. They can also be extremely volatile around reports and supply shocks.

Ways to trade commodities#

Method	How it works	Good for	Watch out for
Futures	Trade standard contracts on exchanges	Active traders; direct exposure	Leverage, expiry, rolling
Micro futures	Smaller versions of popular contracts	Smaller accounts	Same mechanics, smaller size
ETFs and ETCs	Funds holding futures or physical metal	Stock account traders	Roll costs in futures based funds
Producer stocks	Shares of miners, oil companies, farmers	Indirect exposure	Company specific risk
CFDs	Contracts with a broker (outside the US)	Small size, easy shorting	Financing costs, counterparty risk

What moves the main commodities#

Crude oil: global growth, production decisions by OPEC and its allies, US shale output, weekly inventory data and geopolitics. See Crude Oil.
Natural gas: weather above all, plus storage levels and export demand. See Natural Gas.
Gold: real interest rates, the US dollar, central bank buying and demand for safety. See Gold.
Copper: manufacturing and construction, especially in China. See Copper.
Grains: weather in growing regions, planting and harvest progress, and exports. See Agricultural Markets.

Key scheduled reports#

Report	Market	When
EIA Weekly Petroleum Status Report	Crude oil, gasoline	Usually Wednesdays
EIA Natural Gas Storage Report	Natural gas	Usually Thursdays
USDA WASDE (supply and demand estimates)	Grains, softs, livestock	Monthly
CFTC Commitments of Traders	All futures	Weekly, Fridays

Prices can move several percent within seconds of these releases. Many traders avoid entering just before them or reduce size.

A worked crude oil trade#

Contango, backwardation and ETFs#

Commodity futures for later months often trade at different prices from nearby months. Funds that hold futures must keep rolling into later contracts, which in a Contango market tends to reduce returns compared with the spot price. That is why an oil ETF can lose value over a year in which the spot oil price ends flat. Understand a fund's structure before holding it for long periods. See Roll Yield.

Seasonality#

Many commodities have seasonal tendencies: heating demand for natural gas in winter, gasoline demand in summer driving season, and grain prices around planting and harvest. Seasonality is a tendency, not a rule, and weather can overwhelm it. See Seasonality in Commodities.

Risks#

Volatility and gaps around reports and geopolitical news.
Leverage in futures and CFDs.
Physical delivery if futures are held into delivery periods. See Physical Delivery vs Cash Settlement.
Extreme events: in April 2020, the expiring WTI crude oil contract briefly settled below zero as storage filled.

Frequently asked questions#

What is the easiest commodity to trade for beginners?#

Gold and crude oil are popular because they are liquid and well covered by news, and both have micro futures and ETF options.

Can I trade commodities without futures?#

Yes, through ETFs, producer stocks or, outside the US, CFDs, each with its own trade offs.

Why are commodities so volatile?#

Supply cannot adjust quickly, demand changes with the economy, and weather or political events can suddenly change expected supply.

Sources#

U.S. Energy Information Administration, Weekly Petroleum Status Report
USDA, WASDE report

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