Best Commodity Brokers in 2025

Which raw materials can be traded online?

Commodities are raw materials or primary agricultural products that can be bought and sold on global markets. On the stock market, commodities are traded through standardized contracts and financial instruments, allowing investors to gain exposure to crucial resources such as energy, metals, and agricultural goods. These assets play an essential role in the world economy as inputs for manufacturing, energy production, and food supply, making their prices highly sensitive to supply and demand dynamics.

The pricing of commodities is influenced by a variety of factors: geopolitical tensions, weather conditions, technological advances, and shifts in consumer or industrial demand. For example, an oil supply shock in the Middle East or a drought in the US Midwest can drive rapid price changes. To trade these assets online, investors commonly use financial instruments such as CFDs (Contracts For Difference), futures contracts, and ETFs (exchange-traded funds) — each providing different ways to participate in commodity markets without physical delivery. Online brokers and specialized trading platforms have made these opportunities broadly accessible to retail investors.

Investing in Gold

Gold is often seen as a safe haven, especially during periods of inflation, political instability, or market downturns. While the price of gold can fluctuate, it generally holds value over time, making it popular for long-term investors seeking diversification and stability. ETFs and futures allow investors to gain exposure to gold prices without owning physical metal, while physical gold (like coins or bullion) offers an alternative for those wanting tangible assets.

Investing in Brent Crude Oil

Brent crude oil is the leading global oil price benchmark and is highly sensitive to geopolitical events, OPEC decisions, supply disruptions, and cyclical demand shifts. Trading oil often attracts active traders due to its high price swings. Futures and CFDs are favored for short-term strategies, while ETFs can suit those seeking indirect exposure with less leverage.

Investing in Natural Gas

Natural gas is an especially volatile commodity because of its sensitivity to weather (for heating/cooling), storage levels, and shifting energy policies. Price spikes can be rapid and dramatic, making natural gas suited for advanced traders willing to accept significant risk for the potential of outsized gains. Most retail traders access it with CFDs or futures, while ETFs offer a more diversified route.

Investing in Aluminum

Aluminum prices reflect patterns in construction, automotive production, and packaging industries worldwide. While more stable than energy commodities, aluminum still faces cyclical ups and downs tied to global economic growth and production costs. ETFs and futures are common tools for gaining exposure, enabling both hedging and speculative positions.

Investing in Grains (Wheat, Corn, Soybeans)

Grains like wheat, corn, and soybeans form the backbone of global food supply. Prices are highly sensitive to weather events, crop yields, and global trade dynamics. These markets offer attractive diversification for investors looking beyond traditional financial assets. Futures contracts are the standard for active traders, while ETFs opened up access for broader investor profiles.

By understanding each commodity’s unique features, market drivers, and risk profile, investors can better select assets and financial tools suited to their goals and risk tolerance in the dynamic world of commodity trading.

How to invest in commodities?

Several ways exist to invest in commodities depending on your profile and objectives—whether you’re looking for short-term active trading or a more stable position for the long term. Commodities are physical assets (like oil, gold, agricultural goods) but are generally accessed via multiple financial instruments, each with their own mechanisms, advantages and risks. Here is an overview of the main methods and how they compare.

Investing via CFDs (Contracts for Difference)

CFDs are financial derivatives allowing you to speculate on the price moves of commodities without owning the underlying asset. With CFDs, you can take long (buy) or short (sell) positions on a wide range of commodities and benefit (or lose) based on price movements. They are popular for short-term trading, and their leverage feature allows you to control a larger exposure with less capital. However, leverage also increases risk—losses can exceed initial investment, and holding overnight positions can incur additional costs.

Example: CFD on Oil

Suppose you believe that the price of WTI crude oil (currently $75/barrel) will rise. You enter a CFD to buy 100 barrels. If oil rises to $80/barrel, your profit is ($80-$75) x 100 = $500. If it falls to $70, your loss is ($70-$75) x 100 = -$500. No actual oil is delivered; profits and losses are settled in cash.

Investing via Futures Contracts

Futures are standardized agreements to buy or sell a set amount of a specific commodity at a predetermined price and date in the future. Futures are widely used by both institutional traders and companies for hedging (protecting against price volatility) and speculation. Trading requires margin and carries the possibility of both gains and losses. Most retail investors close their contracts before physical delivery.

Example: Wheat Futures Contract

An investor buys a wheat futures contract at $600 per bushel, representing 5,000 bushels. If, at contract expiry, wheat trades at $620, the profit is ($620 - $600) x 5,000 = $100,000. If instead it drops to $590, the loss is ($590 - $600) x 5,000 = -$50,000. Usually, the position is closed before delivery.

Investing via ETFs (Exchange Traded Funds)

ETFs enable investors to gain exposure to commodities or a basket of commodities through a regulated fund traded on stock exchanges. ETFs provide a convenient, liquid, and diversified way to invest without needing specialized accounts or handling physical delivery. They often track the spot or futures price of a commodity, and their value fluctuates based on the underlying market.

Example: Gold ETF

You buy 10 shares of a Gold ETF, each worth $190 (tracking the gold spot price). If gold rises 5% over the following months, the ETF value may similarly rise to $199.50 per share, resulting in a gain of $95. You don’t own gold bars directly; returns follow gold prices.

Investing in Stocks of Commodity-related Companies

A more indirect way to gain commodity exposure is by investing in publicly traded companies engaged in extraction, production, or distribution of raw materials. These stocks can benefit from rising commodity prices but are also exposed to company-specific risks (management, debt, etc.) and stock market volatility.

Example: Buying Commodity-Linked Stocks

You invest $2,000 in shares of a large US gold mining company. If the price of gold soars, the company's revenue and stock price may increase, potentially raising your investment’s value to $2,400. If gold declines and costs remain high, the stock could drop below your initial investment.

Investing in Physical Commodities

The traditional approach involves purchasing and holding the physical commodity. Most common are precious metals such as gold and silver, held as coins or bars. Physical ownership offers advantages like tangible security and potential preservation of value during market stress. Downsides include storage costs, insurance, and liquidity when reselling.

Example: Buying Physical Gold

You buy a 1-ounce gold coin for $2,000, storing it in a certified safe. If gold rises to $2,100/oz, you can resell the coin and realize a profit of $100 (minus transaction or storage costs). You directly own the asset.

*Direct physical ownership of energy products (oil, gas) is generally impractical for individuals.

Each method carries its own set of opportunities and risks, and there is no universal solution. The right approach depends on your investment goals, risk tolerance, and desired level of involvement. Diversifying across several of these instruments may be considered to balance risk and reward in your investment strategy.

Which raw material suits your investor profile?

When investing in commodities, it's essential to remember that not all assets behave the same way. Some, like gold, are known for their stability, while others, such as natural gas or crude oil, are highly volatile and sensitive to geopolitical or economic news. Your choice of commodities should reflect your experience, your appetite for risk, and your ability to manage rapid market changes. Here’s how to align your commodity investments with your investor profile.

🟢 Beginner: Stable and Predictable Commodities

For newcomers, it's safer to focus on more predictable and widely-used commodities. Gold and aluminum are particularly suitable for beginners because of their market characteristics:

• Gold
• Low to moderate volatility, acts as a “safe haven” asset in uncertain times.
• Used for wealth preservation and portfolio diversification.
• Typically less affected by sudden geopolitical events.
• Aluminum
• Steady demand due to use in construction, transport, and utilities.
• Less volatile than energy commodities; market movements are easier to track.
• Less prone to speculation compared to precious metals or energy assets.

Recommended strategies

• Use ETFs (Exchange-Traded Funds) or commodity-backed funds for exposure without complex trading.
• CFDs (Contract for Difference) with low leverage can be considered for small, controlled positions.
• Avoid day trading; focus on longer-term holding to mitigate short-term swings.

🟡 Intermediate: More Dynamic Assets Exposed to Current Events

At an intermediate level, investors can look at commodities whose prices react more actively to global news and economic changes, like oil and grains.

• Oil (Crude)
• Higher volatility due to OPEC decisions, geopolitical tensions, and economic data.
• Requires watching supply/demand factors and energy sector news.
• Grains (Wheat, Corn, etc.)
• Sensitive to weather, harvest reports, and export/import regulations.
• Price swings can be significant in response to global supply disruptions.

Recommended strategies

• Swing trading using CFDs or ETFs: hold positions from several days to weeks to capture medium-term market moves.
• Always set stop-loss orders to protect against unexpected price drops.
• Monitor economic calendars and news feeds for relevant market-moving events.

🔴 Expert: Highly Volatile and News-Driven Assets

For experienced investors, the most volatile commodities, like natural gas and short-term trades on petroleum and grains, offer both high risk and high potential reward.

• Natural Gas
• Extremely volatile, with rapid price changes based on weather, storage data, and macroeconomic trends.
• Requires quick reaction to data releases and strong discipline.
• Oil (Short-Term/Day Trading)
• Short-term and intraday trades can capture sharp price movements.
• Heavily influenced by real-time news events and technical signals.
• Grains (Short-Term Trading)
• Tactical trading around crop reports, weather shifts, or export data.
• Frequent, short trades based on market catalysts.

Recommended strategies

• Scalping and day trading: make multiple trades per session based on technical indicators and breaking news.
• Use advanced risk management: tight stop-losses, proper leverage (avoid over-leveraging), and hedging techniques.
• Technical analysis tools (moving averages, RSI, MACD) should guide trade entries and exits.
• Stay continuously informed with real-time news and data releases pertinent to your commodities.

Choosing the right commodity for your investor profile means balancing potential returns with your capacity for handling risk and market complexity. Adapt your strategies as you gain experience, and always keep risk control as your top priority.

How to choose a broker for trading commodities?

Choosing the right broker is one of the most critical steps for anyone looking to trade commodities effectively and securely. A reliable, well-regulated broker can make a significant difference—not just in the range of assets you can access, but in the safety of your funds and the overall trading experience. Here are the essential criteria to analyze when selecting a broker for commodity trading:

By carefully analyzing these criteria, you’ll be well-equipped to choose a trusted broker that aligns with your trading objectives and priorities.

Why invest in commodities?

Investing often raises a question: should commodities really be part of a long-term portfolio in a world dominated by stocks and bonds? While not always in the spotlight, commodities deserve thoughtful consideration. Their unique characteristics—distinct from traditional financial assets—grant them a strategic, albeit nuanced, role within an investment strategy designed for resilience and adaptability.

Commodities, by nature, tend to operate according to economic drivers different from those influencing equities or fixed income. Their prices are shaped by supply-demand factors, weather events, geopolitical tensions, and global trends in consumption and production. Because these influences can diverge meaningfully from those affecting other asset classes, commodities often display low or even negative correlation with stocks and bonds. Incorporating them can therefore help to reduce overall portfolio volatility, acting as a buffer during times when traditional assets face synchronized downturns.

Inflation can erode the purchasing power of portfolios over time. Commodities—especially key goods such as energy, metals, and agricultural products—often see their prices rise alongside broader price levels. When inflation accelerates, commodity prices have historically moved in tandem, thus potentially offsetting the negative effects high inflation can have on financial assets. For investors, this connection may provide a valuable hedge during inflationary cycles, making commodities an important tactical consideration.

Among commodities, precious metals like gold and silver have long been viewed as classic “safe haven” assets. They tend to retain or increase their value in periods of intense market uncertainty, high volatility, or currency devaluation. By serving as a store of value amidst turbulence, precious metals can smooth portfolio performance and help preserve capital when traditional markets falter. While their prices can also fluctuate, their perceived safety makes them a stabilizing force in diversified allocations.

Commodities also present tactical opportunities that can be seized in response to specific global events or shifts in supply chains. For instance, the prices of oil, natural gas, or certain agricultural products can react swiftly to geopolitical crises, natural disasters, or sudden regulations. This responsiveness means that, with careful analysis, investors can potentially capture gains over short- or medium-term periods. However, these windows often demand a solid grasp of macroeconomic cycles and an acceptance of increased volatility.

Key takeaway

Commodities add a strategic dimension to a balanced portfolio: diversification, inflation protection, and crisis resilience. They are not a guarantee of performance, nor are they without risk—prices can be volatile, and many factors can influence returns. Yet, as a carefully sized component, commodities help build robust portfolios that can adapt to shifting economic and market landscapes.

How much does commodity trading cost?

Trading commodities can be attractive due to market volatility and diversification benefits, but it comes with specific costs that can significantly impact your profitability. The main fees you’ll encounter are the spread, transaction commissions, financing (swap) fees, inactivity fees, and withdrawal fees. Understanding each cost is crucial—hidden or underestimated charges can erode your returns. By mastering the structure and calculation of each fee, you’ll be able to make more informed choices and optimize your trading results.

1. Spread

The spread is the primary implicit cost of trading commodities. It’s the difference between the price at which you can buy (ask) and the price at which you can sell (bid) a commodity at any given moment. Brokers set spreads, and they can vary depending on liquidity, volatility, and the specific commodity.

Example of Spread

Let’s say the current market prices for gold are:
- Bid: $2,000/oz
- Ask: $2,002/oz

If you buy 1 ounce of gold at $2,002 and the market price doesn’t move, selling it immediately would get you only $2,000. The spread cost is thus $2 per ounce traded.

2. Transaction Commission

Many brokers charge a direct commission for executing trades. This fee can be a flat amount per contract/lot or a percentage of the trade’s value. Transaction commissions apply to both opening and closing trades and can add up, especially with frequent trading.

Example of Transaction Commission

Suppose you trade one crude oil futures contract:
- Commission to open the trade: $4
- Commission to close the trade: $4
Total commission = $8 for a round trip (opening and closing one contract).

3. Financing (Swap) Fee

If you hold a leveraged commodity position overnight—such as a CFD (Contract for Difference) or using margin—you’ll likely incur a financing, or swap, fee. This reflects the interest on borrowed capital and can vary daily.

Example of Financing (Swap) Fee

You hold 1 silver CFD overnight and your broker charges a swap fee of $1.50 per night.

- If you keep the position open for 5 nights, total swap fees = $1.50 × 5 = $7.50

4. Inactivity Fee

Brokers may apply an inactivity fee if there’s no trading activity in your account for a certain period, typically several months. This fee is often deducted monthly after the inactive period starts.

Example of Inactivity Fee

Your account remains inactive (no trades or open positions) for 6 months. Your broker begins charging an inactivity fee of $10/month. After three more months of inactivity, you’ll have paid $10 × 3 = $30 in fees.

5. Withdrawal Fee

Some brokers charge you a fee when you withdraw funds from your trading account. This could be a flat fee or a percentage. These fees are often fixed per withdrawal, regardless of the amount.

Example of Withdrawal Fee

You request a withdrawal of $500 from your trading account. Your broker applies a fixed withdrawal fee of $10. So, you receive $490 in your bank account, and $10 is retained by the broker as a fee.

Live commodity prices

What is the taxation on income from commodities in the US?

Investing in commodities can generate different types of income depending on the financial instrument used, such as derivatives, funds, stocks, or physical metals. In the US, the tax treatment of such income generally falls under the taxation of investment income, but specific regimes apply depending on the product structure. It is essential to understand how each investment type is taxed to ensure compliance and optimize your after-tax returns.

CFDs (Contracts for Difference) and commodity futures are primarily taxed according to Section 1256 of the Internal Revenue Code. Under this regime, gains and losses are "marked to market" at the end of each tax year, which means positions are treated as if they have been sold at year-end, regardless of whether you actually closed them. The so-called 60/40 rule applies: 60% of the realized gains (or losses) are taxed at the long-term capital gains (LTCG) rate, and 40% at the short-term capital gains (STCG) rate, irrespective of the holding period. This blended rate can be advantageous for active traders compared to the regular short-term rate. These gains are reported on IRS Form 6781.

Commodity ETFs are taxed differently depending on their structure. If the ETF is structured as a grantor trust and holds physical metals, such as gold or silver, gains are taxed at the higher collectibles rate (up to 28%), even if held for more than a year. Other commodity ETFs (such as those structured as partnerships and investing in futures contracts) may generate a mix of ordinary income, short-term, and long-term capital gains. It's important to review the fund's tax documentation (K-1 or 1099) and the IRS treatment specific to the ETF in question.

Shares of mining or oil & gas companies are treated as ordinary stocks for US tax purposes. Capital gains from the sale of these shares are taxed at preferential long-term rates (up to 20% for holdings over one year, plus potential 3.8% Net Investment Income Tax for high-income taxpayers), and at higher short-term rates if sold within a year. Dividends may qualify for the reduced qualified dividend rate depending on the status of the company and the investor’s holding period. These rules follow the standard regime for equities in the US.

Physical precious metals (gold, silver, platinum, etc.) are considered collectibles under US tax law. Gains realized on the sale of such assets are taxed at a maximum federal rate of 28%, regardless of holding period. This rate is higher than the standard long-term capital gains rate for stocks or real estate. Losses may be used to offset capital gains, but the collectibles status is significant to consider for investors holding physical bars or coins.

Each investment in commodities comes with its own tax treatment, reporting requirements, and potential tax planning options. It's important to document all transactions carefully and, if in doubt, to consult professional tax advice specialized in US regulations to optimize your investment strategy within the legal framework.

Raw materials: understanding the Contango and Backwardation effect

When investing in commodities, it's essential to understand not just the current (or “spot”) prices, but also how prices are expected to evolve in the future. The price curve—comparing today’s spot price to future prices set in contracts—is more than a chart: its shape offers critical clues about market dynamics. Two fundamental forms, called "contango" and "backwardation," signal different things about market sentiment and can significantly influence investment outcomes.

Contango: When the Future is Pricier than the Present

Contango describes a situation where futures prices for a commodity are higher than the current spot price. This is most common in markets for storable commodities, like oil, metals, or grains.

There are several main reasons why contango happens. First, storing a physical commodity involves costs: warehouses, security, insuring against loss, and financing inventory all add expenses. Market participants expect to be compensated for these costs, pushing up the price of contracts that settle in the future compared to buying and holding the commodity now. Additionally, in periods when there’s no immediate shortage and supply is high, sellers aren’t motivated to charge a premium for prompt delivery, so the spot price remains lower.

Example: Oil in Times of Surplus

Imagine global oil supply exceeds demand, filling up storage tanks worldwide. Producers are content to sell oil for future delivery, but storing the surplus is costly. Futures contracts for oil in six months' time trade at a higher price than immediate delivery—reflecting not just today’s price, but also storage and finance costs until that future date. This is classic contango.

Backwardation: When Urgency Rules the Market

Backwardation is the opposite setup: futures prices are lower than the current spot price. This typically signals there is an urgent demand for immediate delivery or a risk of future supply shortages.

Backwardation often occurs when a commodity is in short supply, or when buyers urgently need the physical good now—think of grains after a poor harvest, or energy in a region facing disruptions. In this scenario, buyers compete for limited supplies, pushing up the spot price. Meanwhile, market players anticipate that supply issues will eventually ease, so future prices remain lower.

Example: Wheat During the Ukraine War

During the early months of the war in Ukraine—one of the world’s breadbaskets—supply disruptions caused a rapid surge in wheat spot prices as buyers scrambled to secure deliveries. Futures contracts several months out were priced significantly below the front-month contracts, signaling backwardation due to urgent near-term demand and uncertainty.

Why is This Crucial for Investors?

Understanding whether a commodity market is in contango or backwardation is vital for anyone investing via financial products like ETFs, ETCs, or mutual funds that track commodity prices using futures contracts. These products don’t hold the actual commodity. Instead, as each futures contract nears expiration, the fund sells it and buys the next one in line, a process called “rolling.”

When a market is in contango, rolling means selling a cheaper expiring contract and buying a more expensive new one. Over time, this “roll cost” can erode returns—even if spot prices stay flat. Conversely, in backwardation, the fund sells pricier expiring contracts and buys cheaper ones, adding a “roll yield” that can boost returns. That’s why knowing the shape of the price curve isn’t just technical trivia: it can directly affect the long-term performance of commodity-based investments.

Summary

Analyzing the shape of the commodity price curve—contango or backwardation—helps investors spot market signals, gauge supply-demand dynamics, and adjust their strategies accordingly. It’s a key step for anticipating potential gains or costs in futures-based products and making informed investment decisions.

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.