Two asset classes down, two to go. Lets look at what commodities are.
Commodities
In economics, a commodity is an economic good or service that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them.Wikipedia
There are two types of commodities, hard and soft.
Hard commodities are typically natural resources and are mined or extracted i.e. Oil, Gold.
Soft commodities are typically grown i.e. wheat, pork bellies.
Commodity Prices
Lots of factors impact the price of commodities, these can be split into two camps – demand and supply factors. Factors like the weather and an earthquake might reduce the supply of a commodity, push its price up. Factors like a recession or change of usage over time might reduce demand and push the price down. Nearly all commodity prices are in US dollars, so the value of a commodity for those users buying in another currency also effects price. Here is live chart for Brent, a type of oil, just look how it changes over time.
