Singapore is one of the leading financial hubs in the world. When it comes to commodities trading, Singapore is one of the most popular markets globally. There are many reasons for this, but the chief among them is the liquidity of the market and the wide range of products available for traders.
What are commodities?
Commodities are physical goods that are bought and sold for economic purposes. They include products such as metals, energy, livestock and agricultural products.
How are commodities traded?
Commodities are usually traded through futures contracts. A futures contract is an agreement between two parties to buy or sell a commodity at a specific price on a particular date in the future.
What factors affect the prices of commodities?
Several factors affect the price of commodities. These include:
Supply and demand
If there is an ample supply of a commodity, its price will decrease, which works vice versa. It affects investors as well since they can buy low and sell high.
The political climate also affects the prices of commodities. For example, an unfavourable political situation in an oil-producing nation may increase the cost of petroleum as it affects supplies.
Weather conditions such as droughts can raise agricultural product prices by making them more expensive.
People who buy futures contracts for speculative purposes without actually having any use for those products
The most popular commodities in Singapore
Here are some of the most popular commodities to trade in Singapore:
Gold is still the most popular commodity to trade in Singapore. It is indeed known as a safe-haven asset often used to hedge against market volatility. Gold is also a valuable commodity because it has several industrial applications. Singapore is one of the largest gold refineries globally, and it is home to several large gold mines.
Crude oil is another popular commodity to trade in Singapore. It is a crucial ingredient in many industrial and consumer products, and economists and traders closely watch its price. Singapore is a critical player in the global crude oil market, and it is home to several refineries and storage facilities.
Silver is another popular commodity to trade in Singapore. It is a valuable metal that has many industrial applications. Silver also has several investment applications, and it is often used as a hedge against volatility in the markets. Singapore is one of the largest silver refineries globally, and it is home to several large silver mines.
How to trade commodities in Singapore?
You need to open an account with a broker that offers access to the Singapore commodity market to trade commodities. You then need to deposit funds into the account to begin trading.
Once you have familiarised yourself with how the market works, you can start making transactions to profit from price fluctuations. It is important to remember that commodities trading can be risky, so it is essential to do your research before investing.
When choosing a broker, look for low commissions and good/excellent customer support/services that will help you through your journey as a beginner trader. Start by investing with small amounts so you won’t lose much if the trade doesn’t go as planned, and keep practising to hone your skills. Always speak with a trusted expert before making any investment decisions.
Begin by investing with small amounts so you won’t lose much if the trade goes as planned, and keep practising to hone your skills. Always consult with an expert before making any investment decisions.
When new investors get involved with commodities trading in Singapore, it is essential to be aware of their prices’ various factors. It is also vital to have a broker that offers low commissions and good customer service and access to the Singapore commodity market like Saxo Bank.