What Are Commodities and How Do They Work?
First, let’s define commodities as the raw resources that are used to make the items that people buy, such as food, furniture, and fuel or petrol.
Furthermore, these materials may be categorized into:
- Agricultural: like wheat
- Energy: e.g. crude oil
- Metals: gold, silver, and other precious metals
- Soft: sugar, cotton, coffee.
Moreover, the last ones are those which can’t be saved for long periods of time.
Since the 90s, commodities have expanded as an asset class. Today, investors can invest in commodities futures markets through a variety of operations and cover a wide range of commodity exposures.
Investing in commodities
When talking about commodities investments are often used to give three important benefits to investors’ projects: inflation protection, diversification, and return potential.
Because commodities are “real assets,” they react to changing economic fundamentals differently than “financial assets,”.
For instance, commodities are one of the few asset sectors that profit from rising inflation. When demand for goods increases, the price of those products as well as the prices of the commodities required to manufacture those goods rises.
Diversified commodity exposure can provide investors with a number of possible benefits, however, investing also comes with risks.
For instance, there may be underperformance during cyclical downturns in the global economy, when consumer and industrial demand slows;
Also, they may be influenced by market, political, regulatory, and natural conditions, and are not suitable for all investors.
Fortunately, there are multiple online tools for getting real-time and historical commodities rates in a variety of currencies (even crypto)
One of the most reliable ones is Commodities-api.com, a website that allows you to track the price of a variety of commodities. Finally, you can forecast prices and easily translate them to the currency of your choice.
What exactly is it?
This web API provides precise rate data for a wide range of commodities in a variety of currencies.
Commodities-API originated as a modest, minimalist Open-Source API for financial institutions’ recent and historical commodity prices.
With an exactness of two decimal points and a frequency of up to every 60 seconds, the API can provide real-time commodity data. Commodities-API is designed on a solid back-end architecture that ensures high availability and response speeds for certain API calls of less than 50 milliseconds. Only a few of the functions include delivering commodity exchange rates, converting single currencies, and returning Time-Series and Fluctuation data.
The Commodities-API protects your connection with bank-grade 256-bit SSL encryption.
Commodities-API is used by thousands of developers, small businesses, and huge corporations on a daily basis. As a consequence of its dependable data sources and 6+ years of expertise, this API is the most popular site for commodity rates.
Also published on Medium.