5 Best Commodity Market Ideas

1. Investmentz.com 5 Best Commodity Market ideas

3. What are commodity markets? Commodity markets are a little different in terms of trading from traditional equity markets. • A commodity market is a market that trades in primary economic sector rather than manufactured products. • Soft commodities are agricultural products such as wheat, coffee, cocoa, fruit and sugar. • Hard commodities are mined, such as gold and oil.

4. 5 best commodity market ideas that can work in India: • Cautious to negative on MCX crude • Uncertainty factors could help MCX gold • Using bounces-to-sell strategy for copper might help • Going short-term negative on MCX zinc could be a good option • Long trade on NCDEX cumin on shortfall in supply could be a good option

5. Cautious to negative on MCX crude • OPEC is finding it increasingly difficult to influence crude prices, which means that MCX crude could come under pressure. • Moreover, Russia has joined the OPEC consortium in terms of cuts in crude supply. • However, the US appears to enjoy a few clear distinctive advantages in terms of expansion in crude supply. • Further, Trump has already withdrawn from the Paris Climate Agreement, which opens significant opportunities for the US for undertaking substantial expansion of its shale capacity. • Thus, going cautious to negative on MCX crude.

6. Uncertainty factors could help MCX gold • The World Gold Council has announced that the gold demand for 2017 will not be substantially more than the previous year. • Although India and China are the highest consumers of gold, gold prices will not be driven by consumption demand. • Moreover, volatility in North Korea and Middle East coupled with other global factors could influence the direction gold prices takes. • All these uncertainty factors could help MCX gold.

7. Using bounces-to-sell strategy for copper might help • The fact that copper has corrected for two weeks on-the-trot gives it a weak outlook. • Thus, waiting for a bounce in price to sell could be a good strategy. • Moody’s recently downgrading China doesn’t help copper prices either, since China contributes more than half of global copper demand.

8. Going short-term negative on MCX zinc could be a good option • Owing to environmental inspections, many zinc mines in the Hunan province of China were shut down. This led to subdued supply of zinc. • Post completion of inspections, zinc supplies have started flooding the markets, which has brought prices under pressure as well. • Moreover, strength of the US Dollar will weigh on MCX Zinc. Thus, going short-term negative on MCX zinc could be a good option

9. Long trade on NCDEX cumin on shortfall in supply could be a good option • With more than 70% of the world’s supply of cumin, India is the world’s largest producer of cumin. • Other cumin producer such as Syria and Turkey are much smaller. Exports of cumin in India are expected to remain buoyant despite higher prices of the commodity. • The commodity saw decent open interest gains, which again indicate towards pricing heading upwards. Therefore, long trade on NCDEX cumin on shortfall in supply could be a good option.

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