Getting Started with Capital Investment
Commodity Impact Factor Analysis and Investment Strategy
What is bulk material?
Commodities, also known as commodities, are tradable and mass-produced natural materials, resources or commodities that are generally traded on global markets in the form of futures or spot. While commodity price changes are mainly dependent on market supply and the global economic environment, they are also considered economic indicators because they directly reflect industrial production and consumer demand.
Commodity Category
The common CSI Commodity Equity Index is generally divided into 3 categories: Energy, Metals, Shenzhen Agricultural Products Group, including Plastics, Wood, and Chemicals.
Energy: including crude oil, natural gas, gas, etc.
Metal Type: Including Gold, Steel, Copper, Aluminum, etc.
Shenzhen Agricultural Products Group: Including Chicago SRW Wheat, Corn, Soybean, Cotton Flower, etc.
Commodity Price Trends
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Factors Affecting CSI Commodity Equity Index Prices
The price of bulk commodities is mainly determined by the supply and demand of the goods.
The supply side is complicated by the CSI Commodity Equity Index's supply link to the city, including mining and exploration, processing, transportation and storage environments. At the same time, there is a supply chain resistance, which will affect the supply of the CSI Commodity Equity Index and move other prices.
There are four main factors that affect supply disruptions:
WEATHER AND NATURAL DISASTERS
All types of CSI Commodity Equity Indices have seasonal regulations, while Crude Oil Products and Shenzhen Agricultural Products Group are more susceptible to air pollution, extreme weather or storms during the day, which can greatly reduce supply, push prices up and reverse.
Environmental Policy
The promotion of sustainable development and environmental policies may affect the demand for certain commodities, such as the extraction of fossil fuels may be restricted.
Geographical situation
When conflicts break out between countries, the supply of commodities is severely affected. For example, Russia is one of the world's largest suppliers of metals and Ukraine is one of the main producers of industrial metals, so when the war breaks out, the markets are worried about supply chain disruptions causing the price of precious metals to soar; on the other hand, the market's risk-averse sentiment rises, stimulating gold Prices rose and crude oil rose due to supply disruptions.
Technological Advances
As technology improves in one of the supply chains, there is an opportunity to increase production efficiency, lower production costs, stimulate supply growth, and lead to lower commodity prices.
Among the factors that affect the amount of demand are:
Monetary Policy
Since commodities are denominated in dollars, fluctuations in the dollar (such as central bank interest rate decisions and money supply) can directly affect investor behavior and demand for commodities, directly affecting prices. Most of the time, the dollar exchange rate and commodities are inversely related, especially gold. For example, when the dollar rate falls (i.e. the dollar depreciates), the cost of gold purchases by holders of other currencies decreases, which leads to an increase in the price of gold.
Economic Performance
If the global economic environment is ideal, indicators such as GDP, unemployment rate, inflation rate, etc., market demand for commodities will increase accordingly, and commodity prices will rise, and vice versa.
Price of Alternatives
Commodity prices are also subject to changes in the prices of alternatives, which may drive demand and prices for commodities (crude oil, gas, gas, etc.) when the price of alternatives (renewable energy) rises.
How to invest in commodities in Hong Kong
Choosing the Right Commodity Asset
If you want to invest in commodities, you can:
1. CSI Commodity Equity Index Futures
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2. SHANGPINETF
Otherwise, you can invest in a SHANGPINETF in Futu, such asGold ETF、Silver ETF, Energy ETF and Crude Oil ETF。 Looking to handle various types of Dai Dai Dai products, Futubull specifically set up an ETF specialty, and all ETF shares of different major commodity categories are unbeatable.
Find a CSI Commodity Equity Index Trading Trading Platform
Futures and ETFs of various CSI Commodity Equity Indices have been landed and trading has been opened. But before investing, be sure to open an account!
Step 1: Become a Securities Account User
Head over to Futubull and sign up for a new account.(Register now)
Then open a securities account on the basis of the Futu account and you can immediately trade in commodity ETFs.(Open an account now)
Step 2: Open a Futures Account
If you want to invest in CSI Commodity Equity Index Futures, don't forget to open a Futures Futures account. Click the Trade button on the Futures Details Quote page, the Futures product category that has not been opened will be guided by the start, and then you can trade Futures immediately after the start.
Futures contracts are derivatives and are not suitable for all investors. You should carefully assess your suitability to participate in such transactions with regard to your investment experience, investment objectives, financial resources and other relevant conditions. Investing involves risk, and futures prices can rise and fall. The risk of loss in trading futures contracts can be great. In some cases, the loss you incur may exceed the amount of the initial deposit. You may not be able to avoid losses even if you set alternate instructions such as Stop Erosion or Limit Price. Market conditions may render such instructions unenforceable. You may be asked to deposit additional margin within a short period of time. If the required amount is not provided within the specified time period, your unclosed contract may be closed. However, you will still be responsible for any resulting short amounts in your account. Therefore, you should study and understand futures contracts before buying and selling, and consider carefully whether this trade is right for you based on your financial situation and investment objectives.
