Commodity Markets Definition

In finance, a commodity is a physical good that can be bought and sold. Commodities are used as inputs in the production of other goods and services. They are natural resources such as oil, gas, gold, silver, wheat, corn, and pork bellies.

A commodity market is a place where commodities are traded. The prices of commodities are determined by supply and demand. The most important commodity markets are in Chicago, London, and New York City.

Commodity markets can be very volatile. For example, the price of oil has fluctuated greatly over the past few years. This volatility can be caused by political unrest in countries that produce oil, changes in global demand for oil, or weather events that disrupt the supply of oil.