MCX Commodities Uncovered: The Must-Knows and Essential Insights [2024]

The Commodity Markets might not be as popular as stock markets at this point but day by day the hype for this is ever-expanding. The MCX is such a market that might just go in your favor if you give it a chance.

With War looking around every corner, elections underway and all geopolitical events the Commodity Market is an exciting adventure waiting to be uncovered. Before that, we’ll have to check out what MCX is and what it offers. 

MCX – What it is and Commodities Within:

The National Commodity Exchange is an electronic commodities exchange based in India. It can be considered as a gateway to trades in gold, silver and other expensive commodities including bullions, non-ferrous metals and plantations. Interestingly enough, the MCX is our country’s first exchange to offer a Commodity Options contract and focuses on providing its participants with a neutral and transparent trade mechanism. 

What is the role of NCDEX and MCX?

As a trader or investor interested in Commodities the NCDEX is also a market that you should be familiar with. The NCDEX or the National Commodity and Derivatives Exchange is considered a multi-commodity exchange that allows trading in agricultural commodities such as wheat, oil, soybean, etc. It was incorporated as a public limited company in 2003, NCDEX commodity thereby providing farmers peace of mind by cutting out middlemen and assisting them in the price discovery process. While the MCX is a gateway to gold, silver and other precious commodities. 

Commodity Boom: What are the most popular commodities traded in India?

Before we get into the popularity contest of commodities, we’ve got to know the type of commodities which are traded in India. So here’s a refresher course on that. 

The Commodity Market in India is divided into 2 primary categories. 

The first is the Physical Commodity market and the Second is the Financial Commodity Market. 

1). Physical Commodity Market: By the name, the type of Commodity Market can be identified. The traders usually meet to buy and sell the commodities. These commodities mainly consist of agricultural products like pulses, grains and cereals, sometimes industrial products like fertilizers and textiles and also petroleum products like diesel and oil. In addition, metals like silver, copper and gold are also included within. 

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2). Financial Commodity Market: Talking about this market it is based on paper trading and contracts as well. The commodity markets include futures markets for natural resources such as metals, agricultural products, energy, etc. 

So now that we’ve understood the different markets let’s get into the most popular commodities trades in India. 

1. Crude Oil:

Crude Oil is a black liquid that traders and investors are fascinated by and hence it is one of the most sought-after commodities. With a vibrant variety of several byproducts such as petroleum and diesel, the demand for crude oil is increasing daily. 

This high demand usually leads to the eruption of geopolitical tensions that are happening worldwide. OPEC is a union of nations and an organization that is so powerful that it controls the production of oil. In top countries such as Saudi Arabia, the  USA and Russia’s oil flows are controlled by OPEC. 

2. Gold:

Gold, everyone’s favorite auspicious commodity, gives a shine in the market that traders cannot resist. Gold is not just auspicious but also something which provides security to one’s portfolio. When we see the price value for the US dollar fall, we’re focused on buying more gold for security and when the dollar goes up, gold prices tend to fall as they share an inverse relationship. 

3. Silver:

Shining silver is also a sought-after commodity that is just close to gold. Recently Silver skyrocketed far beyond Gold due to its high demand for Semiconductors and also Solar panels. 

4. Copper:

Copper might just be considered as a small component but in the bigger picture it is an essential commodity and hence is sought after. The broad advances in industrial metals usually take domestic copper prices to new heights. With China announcing the plan to raise 1 trillion yuan through long-awaited bond issues, the expectations are high and might witness increased demand for industrial metals. Hence it’s best to keep an eye out for copper’s rise as well. 

Final Note:

Commodities might seem quite popular but tracking its trajectory depends upon a lot of factors which include news, geopolitical events, speeches, data and so much more. 

With higher leverage, the risk of commodity trading rises too. Hence, if you’re a beginner, it’s best to consult research experts who monitor the market constantly. 

That’s all for today folks. We’ll be back with more interesting content soon. 

Until then, Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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