For centuries commodity trading has been an integral part of the Indian economy which dates back to days when textiles and spices were bartered. India has always been a major centre for local and global trade of commodities.
With technological improvements, traders can now purchase, sell, and monitor commodity trading online using various trading programs. In this article, we will look at the five most traded commodities in India.
India does not only have a deep connection with gold, but also India is one of the top consumers of gold. Gold is a conventional investment choice in addition to being a well-liked jewellery. Traders can use commodities markets like MCX to trade in gold.
Gold trading in India not only includes actual gold but also includes derivatives in the form of futures and options. A few things that fuel the desire for gold in India are festivities, celebrations, marriages, and its traditional role as a storehouse of wealth.
2. Crude Oil
Crude oil is another essential commodity in India as it powers the country’s energy demands. India is a major importer of crude oil globally, and the Indian crude oil market is greatly affected by international pricing and geopolitical events. Hence, crude oil prices are closely monitored by traders and policymakers.
The sudden spikes in fuel prices can have a significant impact on India’s economy. Traders can use contracts for futures and options that are listed on commodities exchanges to enter the crude oil market.
Silver, frequently referred to as “poor man’s gold” is another precious metal after gold. With high demand for industrial expansion, jewellery, and investment purposes, Silver is a popular choice for commodity trading in India.
You can trade in Silver derivatives such as Futures and Options contracts on exchanges like any other commodity derivatives. Silver is used in many different industries including electronics, solar panels, and healthcare.
Aluminum is a strong and lightweight metal and is essential to several sectors, such as electrical, packaging, transportation, and construction. In India, commodities markets like the NCDEX and the MCX see heavy trading activity in aluminium. These markets provide futures contracts on aluminium, enabling users to protect themselves from changes in price.
Variations in foreign exchange rates, interruptions in the supply chain, and worldwide demand can all have an impact on its costs.
5. Natural Gas
Natural gas is a highly valuable commodity in India and is traded on commodity exchanges in India such as MCX (Multi Commodity Exchange) and NCDEX (National Commodity and Derivatives Exchange). It is utilized in various things such as home transportation, domestic use, power generation and industrial activities.
The prices of natural gas can fluctuate depending on its global supply and demand. Additionally, any changes in weather patterns, geopolitical events, and global energy trends can also impact this commodity.
In this article, we discussed the five most traded commodities in the Indian market. If you wish to start commodity trading online, head to Dhan, one of the leading online trading platforms in India.