CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 51% and 89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
What is commodity trading in forex?
Commodity trading in forex involves speculating on the price movements of physical goods rather than currencies. These markets range from precious metals and energy products to agricultural resources. Unlike traditional commodity exchanges, forex brokers allow you to trade commodities without owning the underlying asset.
Commodities regularly behave differently from currency pairs, often reacting more sharply to specific macroeconomic events. For instance, oil prices frequently mirror geopolitical tensions, while gold often gains during financial uncertainty. This non-correlation provides opportunities for risk management and diversification within a trading portfolio.
local_shippingTrading specific commodities
Are you looking for the best brokers to trade certain commodities? We have you covered! Check out our guides to the best forex brokers for trading gold, palladium, metals in general, or agricultural commodities.
Key features to look for in commodity forex brokers
Finding the right forex broker for commodities is about more than low spreads. Regulation should be the first checkpoint to ensure fund security and transparency. We always recommend brokers that are licensed by reputable authorities like the FCA, ASIC, or CySEC — the kind of brokers that typically score above 90 in our Trust Score methodology.
Access to a variety of commodities is equally important. Brokers that offer metals, energies, and soft commodities allow greater flexibility in trading strategies. Advanced trading tools, mobile access, and transparent pricing structures round out the must-have features for navigating volatile commodity markets.
How do commodity spreads and fees work?
Commodity trading costs depend heavily on spreads and commissions. The spread — the difference between the buy and sell price — can impact profitability, especially for short-term traders. Lower spreads typically reduce costs but may come with added commissions.
compare_arrowsFixed and zero spreads
There are typically two different methodologies brokers follow for determining spreads: they either offer fixed spreads or variable spreads. Fixed spreads can offer certainty in trading costs during volatile moments, but may come at the sacrifice of benefitting from lower spreads during stable market conditions. Note that brokers who advertise zero spreads will either charge commissions instead or will simply be a low variable spread in actuality.
Overnight holding fees, known as swaps, are another consideration. Commodities often carry higher swap rates due to storage and delivery costs factored into pricing. From experience, comparing total costs across brokers — including withdrawal and inactivity fees — can prevent unwelcome surprises.
What is the difference between CFDs and futures?
CFDs (Contracts for Difference) and futures are popular instruments for trading commodities, but they cater to different strategies. CFDs are flexible, offering no expiration dates and the ability to trade fractional contracts, making them ideal for smaller accounts.
Futures, by contrast, are standardized contracts with fixed expiration dates and are traded on regulated exchanges. While they offer deeper liquidity and price transparency, they typically require larger investments. We find CFDs more suited to retail traders, while futures often attract institutional investors with larger capital reserves.
Is commodity trading right for you?
Commodity trading isn’t for everyone, but it suits traders looking for volatility and diversification. Gold, oil, and agricultural products often move independently of currency markets, offering alternative opportunities during forex stagnation.
floodCommodities for uncertain times
In our experience, commodities tend to attract traders during times of economic uncertainty. Gold, for instance, often becomes a safe haven when currencies weaken. Meanwhile, oil prices reflect geopolitical shifts and supply-demand imbalances, making it a favorite for short-term traders.
We must emphasize the need for research and preparation. Commodities can be volatile, with prices influenced by supply chain disruptions, geopolitical events, and natural disasters. However, if you thrive on market analysis and global news, commodities may be a great way to complement your forex strategy.
BrokerNotes.co 2024 Overall Rankings
To recap, here are our top forex brokers for 2024, sorted by Overall ranking.
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Methodology
At BrokerNotes.co, our data-driven online broker reviews are based on our extensive testing of brokers, platforms, products, technologies, and third-party trading tools. Our product testing extends to the quality and availability of educational content, market research resources, and the accessibility and capabilities of mobile platforms and trading apps. We also dive into each broker’s trading costs, such as VIP rebates, inactivity fees, custody fees, bid/ask spreads, and other fee-based data points.
Steven Hatzakis, an industry veteran with decades of experience in the forex market, leads the BrokerNotes research team. All BrokerNotes content is researched, fact-checked, and edited by the research team.
All websites and web-based platforms are tested using the latest version of the Google Chrome browser. Our Desktop PCs run Windows 11, and we use MacBook Pro laptops running the latest version of macOS to test trading on the go. We test mobile apps and products using iPhones running iOS 17 and Samsung devices running Android OS 14.
Note: The online brokers on our site provide the ability to trade forex in one or more ways, such as non-deliverable spot forex (i.e., rolling spot contracts), contracts for difference (CFD), or other derivatives such as futures. The availability of specific markets or features will depend on your country of residence and the broker's applicable brand or entity that services your account(s).
Forex Risk Disclaimer
There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Learn more about foreign exchange risk.
About the Editorial Team
BrokerNotes.co provides unbiased forex broker reviews and ratings to help traders and investors find the best broker for their needs. All content is researched, fact-checked, and edited by our research team and all ratings and rankings are based on the team’s in-depth product testing.
Joey Shadeck is the Content Strategist and Research Analyst for BrokerNotes.co and ForexBrokers.com. He holds dual degrees in Finance and Marketing from Oakland University, and has been an active trader and investor for close to ten years. An industry veteran, Joey obtains and verifies data, conducts research, and analyzes and validates our content.
Jeff Anberg is a Staff Editor at BrokerNotes.co and ForexBrokers.com. Along with years of experience in media distribution at a global newsroom, Jeff has a versatile knowledge base encompassing the technology and financial markets. He is a long-time active investor and engages in research on emerging markets like cryptocurrency. Jeff holds a Bachelor’s Degree in English Literature with a minor in Philosophy from San Francisco State University.
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