What is a Commodity?
What is a Commodity?
Commodities (Specifically, “Hard” Commodities) are generally regarded as a input in the production or use for other goods or services. Generally, a commodity has the similar/same characteristics, regardless of the location it is harvested in. In this example, West Texas Intermediate (WTI) is a type of crude oil primarily traded on the New York Mercantile Exchange (NYMEX), although any oil produced which have the right characteristics can be considered as WTI.
Hard Commodities are not to be confused with Soft Commodities which share similar characteristics in being relatively homogeneous such as rice, wheat, and cattle. The difference between hard and soft commodities consist of how its produced, with hard commodities such as oil and gold being non-renewable and soft commodities, mainly agricultural products, must be grown and cared for.
If there is a time for a currency to be relatively weak, it’s during recessionary periods. A stronger currency entails a rougher time for goods and services to be exported out of the country as those exports are more expensive due to the stronger currency.
We have a relatively light data week ahead regarding the amount of significant data points coming out. However, the economic events are extremely significant in determining the state of their respective economies. Hope you all are staying safe. Here is your week ahead.
In 2020, Silver had a legendary rise from its low during the peak of the Coronavirus lockdowns in March – up over 140%. Analysts (including me) attempted to justify its price and separate its strong correlation with Gold by arguing that Biden’s climate change policies will boost Solar Panels’ use, which extensively uses Silver. This may be a catalyst in the longer term.
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