What is commodity trading? A journey to explore valuable merchandise.

Question

In the world of global investment, commodities (merchandise) have become important assets alongside stocks and bonds🌎. They have high liquidity and are connected to our daily lives. Therefore, their prices act like a thermometer indicating the health of the economy. In October 2025, the commodities market is particularly hot🔍.

The Essence of Merchandise

What is a commodity? A merchandise that is widely circulated. It is used in industry and production, rather than retail.

What sets it apart from ordinary merchandise is its "scale." The supply volume is large. The demand is also significant. The circulation and inventory are enormous. The giants are upstream in the supply chain.

Broadly speaking: Energy, industrial metals, precious metals, agricultural products, soft commodities, livestock products. Additionally, since merchandise from around the world crosses the seas, the shipping index can also be considered a special commodity.

Energy types: Crude oil, gasoline, natural gas. Crude oil is king. Its influence covers everything from food to transportation.
Industrial Metals: Copper, Aluminum, Iron Ore. The lifeblood of industry.
Precious Metals: Gold, silver, platinum. Characterized by being "expensive". They do not deteriorate much. A safe haven for value.
Merchandise: Soybeans, corn, wheat. Supporting the world's dining table.
Soft commodities: sugar, cotton, coffee.
merchandise：pork, beef.

Identifying High-Value Merchandise for Investment

Merchandise is "big," but not everything is suitable for investment. There are constraints of time and place.

For example, electricity

Supply and demand are high, but the transmission range is limited. Prices also vary by region. It’s a bit delicate for investment.

So, what features are preferred by investors?

1. Liquidity is life

A large amount of funds needs to be moving. A market where various players are participating. Crude oil, gold, and soybeans are not a problem.

2. Global Common Price

Merchandise listed on exchanges around the world, allowing for global participation. Crude oil and gold have the same price reference anywhere in the world. Convenient.

3. Ease of Storage and Transportation

Things that are easy to store like metals and grains, and are not too affected by climate.

4. Standardized Quality

Things like gold and crude oil, which have stable quality regardless of the place of production.

5. Stable Demand

Long-term demand items such as energy and food.

6. Ease of Analysis

Basic information is easily accessible, and the reasons for price fluctuations can be understood. It would be good if price movements can be read not only from technical reasons but also from economic reasons.

Looking at all of these, crude oil, copper, aluminum, gold, silver, soybeans, corn, sugar, and cotton are recommended🌟

Merchandise is a global commodity. When the economies of major countries move in the same rhythm, commodity prices also fluctuate significantly. Do you remember the surge in commodity prices as a result of central banks around the world flooding the market with money after the pandemic in 2020?

According to the latest survey in 2025, energy prices are expected to drop by 17%. Metals may also fall by 10%🔋. This is due to the slowdown in the global economy. But interestingly, there is a generational gap among investors. While millennials and baby boomers are optimistic, Generation X seems to be a bit more cautious📊.

How to Invest in Merchandise

There are various investment methods. They can be divided into real business investment and derivative investment. Real business includes spot trading and mining investments.

Beginners should probably start with commodity futures.

Each futures contract has a specific underlying asset. For crude oil futures, it's crude oil.

The next important thing is the expiration date. Futures prices are predictions of the spot price at a certain point in the future. Therefore, it is necessary to predict the price at that time and make investment decisions.

The factors that mainly influence commodity prices are macroeconomics and supply-demand balance. This is called fundamental analysis. It is a key element that determines the direction and range of future price fluctuations.

Of course, technical analysis can also be used 🔮

But both are necessary. When fundamentals are confirmed with technicals, the timing for buying and selling becomes clear. With only technicals, it is difficult to see the strength and duration of the trend. The combination is the strongest 👑

Summary

Merchandise is a major asset alongside stocks and bonds. Investing in merchandise means riding the price fluctuations of the global supply chain.

If you're going to invest, it seems good to combine fundamentals and technical analysis to participate in major commodity futures. In particular, crude oil, copper, aluminum, gold, silver, soybeans, corn, and sugar are promising targets. They have high liquidity and are good students that are easily affected by fundamentals🌈.

In commodity investment in 2025, it might be wise to differentiate between futures, options, and ETFs. If you consider portfolio diversification and expert opinions, risk management will be spot on💰