Whether they are related to metals, energy or food, commodities are a very integral component of everyday life. Likewise, they have the capacity to be an essential option for investors to vary beyond conventional stocks and bonds or to gain profits from a conviction regarding price movements.

In the past, the majority of individuals had no interest in investing in commodities, given that significant amounts of expertise, money and time were required when doing so. Nowadays, there are quite a few different routes that can be taken to get to the commodity markets and a number of these routes ease the process for even average investors to participate.

It is the consensus of the majority of professionals on personal finance & chex systems news programs that getting an investment mix, which is broadly diversified is quite a prudent strategy. However, a number of investors are missing out on exposure to the market to this overlooked category.

Similar to real estate, stocks and bonds, commodities are an essential asset class. In essence, they are tangible assets that are used to manufacture good. Examples of commodities include textiles, timber, metals, livestock, energy and agriculture. The agriculture sector includes such familiar trade goods as wheat, coffee, corn and cotton.

A number of commodity ETFs or exchange-traded funds go along the path of total return indexes that are designed for the purpose of benchmarking the return of fully collateralized commodity futures. However, there are others who make investment in a just one commodity by taking physical delivery.

Below are investing tips for some of the commodities that are expected to head for price gains:

price increase of commodities


Over the next five years, the supply of copper growth will be slow and the demand is expected to increase, particularly from China as the infrastructure of the country and auto markets stabilize.

The year 2012 ended with copper at $3.61 per pound. The projection for 2013 is $3.90 per pound, which represents an increase of 8.03 percent from 2012. The projection for 2014 is $3.72 per pound, which represents an increase of 3.05 percent from 2012.


Additional construction-related and infrastructure stimulus from China should increase prices as 2013 progresses. However, in 2014, the existing level of supplies and high capacity for production will place a floor on prices.

The year 2012 ended with aluminum at $2087 per metric ton. The 2013 and 2014 projection is $2300 per metric ton, which represents a 10.21 percent gain from the end of 2012.


As a result of a weak demand and growing oversupply, nickel has remained at mid-2009 lows; however, it is expected to rebound steadily over the next two years.

The year 2012 ended with nickel at $17,448 per metric ton. The projection for 2013 is $18,300 per metric ton, which represents an increase of 4.88 percent from 2012. The projection for 2014 is $19,800 per metric ton, which represents a 13.48 percent increase from 2012.


The unlimited bond-purchasing program of the European Central Bank combined with the QE3 of the Federal Reserve, will keep pushing gold prices higher; however, prices could be limited by lowered demand in 2014.

The year 2012 ended with gold at $1665 per ounce. The projection for 2014 is $1800 per ounce, which represents an increase of 8.11 percent from 2012.

Investors are predicted to continue putting gold into and ira or 401k at record levels.


In 2012, a sharp drop in production in China assisted in cutting into the oversupply of zinc which dates back to the 2008 to 2009 financial crisis. In addition, the prices of zinc will be boosted if the new leadership in China supports infrastructure growth as well.

The year 2012 ended with zinc at $2040 per metric ton. The projection for 2013 is $2200 per metric ton, which represents an increase of 7.84 percent from 2012. The projection for 2014 is $2300 per metric ton, which represents an increase of 12.75 percent from 2012.


Ever since 2011, production at silver mines has stalled and the demand is expected to continue increasing, particularly for use in jewelry and electronics.

The year 2012 ended with the spot silver price at $30.

4 types of commodities

Incorporating commodities into an investment portfolio makes the provision for a greater level of diversification and this can significantly contribute to lowering the volatility of a portfolio. In addition, commodities have the capacity to provide a method of safeguarding against inflation.

The market for precious metals like gold and silver has fluctuated greatly over the past few years. It is important for anyone seeking to take part in this trade that they understand a bit about the pricing trends with this market. It is important that prior to making any estimations about the price of these precious metals, that users understand a few causes for spikes and drops in pricing.

The first and most common reason for a drop in price is related directly to the stock market. When the stock market does poorly, the cost of gold and other metals tends to take a slight rise. Another reason that prices may rise is a particular event in the course of history. For example, when the stock market crashed in the early 1900s the price of gold skyrocketed because more and more people were hoarding gold to prevent financial ruin. Any time that an event causes people to stock pile these metals, the price rises. This is due to the fact that when less is in circulation, there is a higher demand. Just as with many other products, the less there is to go around, the more people are ready to pay for that particular product.

Another reason that prices go up is because of inflation. When the price of inflation rises above that of the interest rates that are common on things like bonds and treasury notes, the price of metals like silver increase dramatically. This is again due to a general panic or anxiety that tends to permeate the global market making the price of these metals far higher than it may have been before the inflation rates rose. Inflation tends to scare buyers into hoarding metals to prevent financial ruin. These events can make a difference when it comes to the overall price that people are willing to pay for gold and other precious metals. These reasons can be the cause of a dramatic price rise or even a price fall in the case of any precious metal that is being either bought or sold.

The prices that have been current over the past few years can show us a bit about the history of investing. The price of gold has risen from about $272 per ounce to a record $1664. With inflation up, national debt up, and the value of a dollar down, more and more people are turning to investing in metals like silver to help safeguard their hard earned money. The price of silver has risen from $5 an ounce to around $30 an ounce. The recent financial troubles of world powers like Greece, Britain, and the Untied States can be cited as par of the reason that these prices have risen so sharply.

The spot price of any commodity can be found through a quick internet search. There are dozens of sites that are dedicated to the chronicling of prices of precious metal. These sites are available across the internet and can offer some insight into the history of this sort of pricing. In most cases, when there is a significant spike in the price of any item there is some sort of natural, political, or other disaster or event that can be cited for the rush on metals and silver. This type of event is generally the cause of these spikes in price. Often, the prices will remain inflated for some time before they drop a nominal amount. These prices almost never go back to the original cost but only slightly vary and lessen as the panic and anxiety of whatever event occurred dies down.