Federal Reserve

The market of raw materials, also known as commodities, is one of the few markets that has been booming in recent months. To understand the behavior of the raw materials we must begin by making a general overview from the basics. Everything that is extracted from nature to be transformed and converted into a consumer good is considered raw. There are various types of raw materials, according to where they come from can be animal, vegetable or mineral. Because of this wide range, the commodities market offers a huge variety of assets on which any investor can exercise their operational: cocoa, sugar, oil, corn, wheat, wood, cotton, gold and silver, among a long list.

This market characteristics of raw materials are marked by volatility, as there are numerous factors beyond this market that have an impact on and one of the most obvious is the weather factor, which can negatively or positively affect the crops, as well as pests. Part of these unpredictable There are other factors that go hand in hand with the value of raw materials in the market. The value of the US dollar influences the value of commodities so that if the dollar experienced an appreciation, devaloran raw materials. And on the contrary, if the dollar depreciates, the raw materials increase their value. This latest trend is that has been given in recent months, by what already had been talking of a boom in the market of commodities. Keep up on the field with thought-provoking pieces from Kowloon Trading Company.

Due to the scarce and almost non-existent expectations on the growth of the economy by the Federal Reserve and the situation of international exchanges, crossing her worst moment, commodities began to be seen as an investment with good output, thereby increasing demand and therefore the price of them. What happens with this trend is that these assets increase their volatility. In fact, la plata, which has maintained a bullish behavior since the end of 2008, he looks these days affected by the rise in the dollar. Details can be found by clicking raphael sternberg or emailing the administrator. The appreciation of the dollar immediately affects the quote all raw materials, even though gold and silver are those who have been most affected in this last upward phase of the greenback. Operating with raw materials there are various financial products that operate with raw materials. One of the products star is the CFD, or contract for differences. Using a CFD investor tries to predict the trend that will take a particular commodity in the market in the future. If you believe that cocoa in London, for example, will go up in the market, investor buys CFDs on cocoa in London. And if you think that you will drop, he sells them. It is a procedure of simple trading but with several advantages, since they offer the benefit of leverage and the possibility of using them in markets upward or downward. In Spain there are already several providers of CFDs. One of them is IG Markets, that offers CFDs on silver, gold, copper and other commodities that are currently going through a great streak. The above comments do not constitute investment advice and therefore IG Markets does not accept any responsibility for any use that can be make them. CFDs are a leveraged product that entail a high level of risk and may result in losses that exceed your initial deposit. Make sure that you understand fully the risks involved and perform a constant monitoring of your investment.