Best Commodity Brokers in 2025

Which raw materials can be traded online?

Commodities are the raw materials that drive the global economy, from the oil powering industries to the wheat in our daily bread. In finance, commodities refer to standardised, tangible goods traded on global markets. They play a crucial role in economic development—their prices are influenced by supply and demand, geopolitical tensions, weather patterns, and technological advances.

Trading commodities online gives retail investors access to markets that were once reserved for professionals. You can invest in broad categories: energy (like oil and gas), metals (such as gold and copper), and agricultural products (from wheat to soybeans). The main financial instruments available for trading commodities online are Contracts for Difference (CFDs), futures contracts, and Exchange-Traded Funds (ETFs). CFDs allow you to speculate on price changes without owning the asset, futures are standardised contracts binding you to buy or sell at a future date, while ETFs track the performance of a basket of commodities or specific assets.

Let’s take a look at the main categories and their characteristics.

Investing in Gold

Gold is renowned as a store of value and a hedge against inflation or market turbulence. It's less volatile than many other commodities and suits investors seeking stability and diversification. Online, most investors use ETFs for cost efficiency, or CFDs for short-term speculation. In times of crisis, gold typically sees rising demand, but it's best approached as a long-term component in a diversified portfolio.

Investing in Brent Oil

Brent Crude is the international benchmark for oil pricing and one of the world’s most traded commodities. Its price is highly sensitive to geopolitics, OPEC decisions, and supply shocks. Oil trading suits risk-tolerant, active investors seeking to profit from sharp movements. CFDs and futures are the go-to instruments for short-term plays, while ETFs allow easier access for broader exposure.

Investing in Natural Gas

Natural gas is among the most volatile commodities due to seasonal demand, storage levels, and global events. Price swings can be extreme, rewarding nimble traders but carrying significant risks. CFDs and futures appeal to experienced investors who can manage volatility, while ETFs offer more controlled exposure. Due diligence is vital given the rapid market movements.

Investing in Aluminium

Aluminium is essential in aerospace, automotive, and packaging industries. Its price is cyclical, affected by global industrial output and energy costs. This makes it attractive to investors looking to diversify into industrial growth or cyclical recovery. ETFs and futures are standard access instruments, while CFDs offer tactical trading opportunities. The market is less volatile than oil or gas, but still requires monitoring of global industrial trends.

Investing in Grain Commodities (Wheat, Corn, Soybeans)

Cereals such as wheat, corn, and soybeans are global staples, forming the backbone of food supply chains. Prices fluctuate with weather, crop yields, geopolitical tensions (like export restrictions), and biofuel policies. They attract thematic and ESG-minded investors, as well as those hedging agricultural risk. Futures dominate institutional trading, but ETFs and CFDs make the grain markets accessible to individuals. Diversification across different crops can help reduce risk from single-crop failures.

How to invest in commodities?

Several methods allow you to invest in commodities, each catering to different investment profiles and objectives. Whether you’re looking for short-term, active trading or passive, long-term exposure to global resources, commodities are tangible assets that are accessible via a broad range of financial instruments. Below, you’ll find an overview of the main ways to invest in commodities—comparing their features, mechanisms, and practical examples to help you choose the approach best suited to your portfolio diversification goals.

Invest via CFDs (Contracts for Difference)

CFDs allow you to speculate on the price movements of commodities without owning the underlying asset. When trading CFDs, you agree to exchange the difference in the price of a commodity between the time you open and close a contract. CFDs are popular for their leverage and flexibility, enabling both rising and falling market strategies. The main advantage is potentially magnified gains from small price moves, but this comes with a higher risk of losses, sometimes exceeding your initial deposit.

Example: CFD on Oil

Suppose Brent Crude Oil is trading at $80 per barrel. You decide to open a CFD position for 100 barrels with 10:1 leverage, needing just $800 as margin. If the price rises to $82, you close your position, making a profit of $2 x 100 = $200. If the price falls by $2, the loss exceeds your margin, emphasizing the need for caution.

Invest via Futures Contracts

Futures contracts are standardized agreements to buy or sell a specific commodity at a predetermined price on a future date. Futures are widely used by both professional investors and producers, for hedging against price changes or for speculative purposes. They require a higher degree of expertise due to complexity and often larger contract sizes. While they can offer significant gains, the risk of losses—particularly due to market volatility and margin calls—should not be underestimated.

Example: Wheat Futures Contract

You purchase a wheat futures contract for delivery in three months at £180 per metric ton for 50 tons. If the market price rises to £190 at expiry, you can sell your contract or settle the difference, earning (£190 – £180) x 50 = £500.

Invest via ETFs (Exchange Traded Funds)

ETFs offer an accessible route to gain exposure to commodities without directly buying the asset or using derivatives. An ETF can track the performance of a single commodity or a basket of commodities, allowing investors to diversify and trade easily on stock exchanges like any share. ETFs often have lower minimum investments, good liquidity, and less complexity compared to futures or CFDs.

Example: Gold ETF Investment

You buy 100 units of a gold ETF at £15 per unit, investing £1,500. If the price of gold rises by 5%, and ETF units reflect this, your holding increases to £15.75 per unit—your position is now worth £1,575.

Invest in Commodity-related Company Shares

Another way to gain exposure to commodities is by investing in companies operating in these sectors. Share prices often move with commodity prices, but are also influenced by company performance, dividends, and broader market forces. This indirect exposure can bring added diversification, as well as the potential for income from dividends and business growth.

Example: Commodity Stock Purchase

You buy shares of a major UK-listed mining company, such as Rio Tinto, for £50 per share, purchasing 20 shares (£1,000 total). If the share price rises in tandem with iron ore prices to £55, your investment is now worth £1,100.

Invest in Physical Commodities

The traditional method of investing directly in physical commodities remains popular for certain categories—particularly precious metals. Holding physical gold or silver can serve as a hedge against inflation and currency devaluation, but storage, security, and insurance add to the costs and complexity. For industrial or agricultural commodities, practical handling and perishable nature often make physical ownership less feasible for individual investors.

Example: Physical Gold Purchase

You purchase a 100g gold bar at £5,500. Should the gold price rise 10% over the year, your bar would now be worth £6,050, minus any transaction or storage fees.

Each method—CFDs, futures, ETFs, shares, or physical assets—comes with distinct advantages and limitations. Your choice should align with your risk tolerance, investment timeframe, and desired exposure to the global commodity markets.

Which raw material suits your investor profile?

When it comes to investing in commodities, not all assets behave the same way. Differences in volatility, potential return, and exposure to geopolitical or economic events mean that some commodities are better suited for beginner investors, while others require more experience and skill. Choosing the right commodity depends on your knowledge of financial markets, your risk tolerance, and your ability to monitor and analyse news and price movements. Here’s how to match your investor profile with the commodity market that fits you best.

🟢 Beginner: stable and predictable commodities

Investors who are new to commodities should focus on assets that are historically more stable, easier to understand, and less exposed to sudden price swings. Gold and aluminium fit this profile well:

• Gold:
• Low to moderate volatility compared to other commodities
• Widely used as a safe haven and a store of value
• Less affected by short-term economic shocks
• Aluminium:
• Demand linked to global industry, but less volatile than energy commodities
• Stable long-term price trends

Recommended strategies

• Favour investments through ETFs or low-leverage CFDs
• Prioritise medium to long-term holding periods
• Avoid day trading or leverage beyond your comfort zone

🟡 Intermediate: more dynamic assets linked to current events

Investors with some experience may look for commodities offering more opportunities, but requiring regular monitoring of global news and economic indicators. Oil and key agricultural grains such as wheat or corn provide this exposure:

• Oil (Brent, WTI):
• Higher volatility, sensitive to geopolitical tensions and supply-demand changes
• Requires monitoring of global economic indicators and production reports
• Grains (wheat, corn, etc.):
• Prices influenced by climate, harvest reports, and international trade policies
• Cyclical trends and reaction to seasonal events

Recommended strategies

• Use swing trading via CFDs or ETFs for better flexibility
• Place stop-loss orders to limit potential losses
• Stay informed about relevant news and economic data

🔴 Expert: highly volatile assets driven by external factors

Experienced investors can explore the most volatile commodities, where price moves can be sudden and significant. These markets demand advanced technical skills and rigorous risk management.

• Natural gas:
• Extremely sensitive to weather changes and geopolitics
• High daily price fluctuations
• Oil (short-term trading):
• Day trading opportunities based on market announcements and intraday volatility
• Requires rapid reaction to news and technical patterns
• Grains (short-term trading):
• Fast-moving markets around supply or weather announcements
• Sharp intraday price movements

Recommended strategies

• Employ advanced techniques like scalping (very short-term trading)
• Use technical indicators (moving averages, RSI, etc.) and economic calendars
• Apply proper risk management: portfolio hedging, careful leverage control, frequent reviews of positions

Choosing the right commodity depends above all on your own investor profile. Start simple, increase your knowledge step by step, and always adapt your strategies to your level of experience and your appetite for risk.

How to choose a broker to trade commodities?

Choosing the right broker is a crucial step for anyone who wants to trade commodities safely and efficiently. A reliable broker serves as your gateway to global commodity markets and determines your access to different products, quality of trading tools, costs, and security of your funds. Understanding the selection criteria will help you protect your capital, optimise your trading conditions, and focus on your investment strategy with confidence.

Why invest in commodities?

Investors seeking to build resilient and balanced portfolios often ask: is it really worthwhile to allocate part of their assets to commodities? Far from being a niche or speculative add-on, commodities actually play a nuanced and strategic role in portfolio construction, especially for those looking to navigate an ever-evolving economic climate. However, as with any investment choice, their inclusion should be considered with both their advantages and limitations in mind.

Commodities tend to follow their own market cycles, which are often distinct from those of equities and bonds. Factors that move commodity prices—such as supply shocks, weather events, or geopolitical developments—are not always the same ones that impact the stock or fixed income markets. Including commodities—whether agricultural products, energy resources, or industrial metals—can therefore help dilute concentrated risks and reduce overall portfolio volatility. This diversification effect has been observed especially during periods when traditional asset classes move in tandem, providing an additional layer of balance.

Rising inflation can erode purchasing power and dampen the real returns of stocks and bonds. Certain commodities, particularly those linked to everyday consumer needs (for example, foodstuffs or energy), have a tendency to appreciate when inflation takes hold. This is largely because their prices are directly influenced by inflationary pressures in raw materials and supply chains. As such, including commodities in an asset allocation can, within reason, act as a partial hedge against an inflationary environment by preserving the real value of a portfolio.

Precious metals, and especially gold, have long been perceived as “safe havens” during uncertain times—whether due to economic downturns, market turbulence or geopolitical conflict. Historically, their role has been to cushion portfolios against extreme market volatility, providing a store of value when confidence in other assets weakens. While not entirely immune to fluctuations, gold and its peers often move differently from equities, enabling them to serve as buffers when turmoil strikes elsewhere in the markets.

Beyond long-term strategic allocations, commodities can also present tactical opportunities for more active investors. For instance, energy markets such as oil can display significant price movement in response to global supply disruptions, policy changes, or shifting economic outlooks. This volatility can create short- to medium-term windows for gain—but also requires careful assessment and a clear understanding of the risks involved. The cyclical and sometimes unpredictable nature of these markets underpins the importance of remaining disciplined and well-informed when seeking to capitalise on such opportunities.

Key Takeaway

Commodities are by no means a guarantee of returns. However, when integrated thoughtfully, they represent a strategic component of a well-diversified portfolio. Their unique risk-return characteristics—inflation sensitivity, diversification potential, refuge qualities, and tactical opportunities—can help strengthen a portfolio’s resilience and adaptability across market cycles. As always, proper risk management and a considered approach are essential.

How much does commodity trading cost?

When trading commodities, understanding the various fees is essential to accurately calculate your real profit or loss. These costs include the spread, transaction commission, overnight financing (swap) fees, inactivity charges, and withdrawal fees. Each of these can impact your returns, sometimes significantly. Knowing how they work and how they add up allows you to better plan your trading strategy, potentially reducing unnecessary expenses and optimising your gains.

1. Spread

The spread is the difference between the buying (ask) price and the selling (bid) price offered by your broker. In commodity trading, the spread represents an immediate cost: in order to break even, the market price must move in your favour by at least the size of the spread.

Example of Spread

You want to trade crude oil. The broker quotes a buy price of $70.50 and a sell price of $70.40. The spread is $0.10 per barrel. If you buy 100 barrels, your immediate cost is 100 x $0.10 = $10.

2. Transaction Commission

Some brokers charge a commission each time you enter or exit a position. This fee can be a flat amount or a percentage of the trade value. It is applied independently of the outcome of your trade, so it must be considered in your profitability calculations.

Example of Transaction Commission

You buy £10,000 worth of gold contracts. The broker charges a £4 commission per trade, both at opening and closing. Total commission cost for a round trip trade: £4 (buy) + £4 (sell) = £8.

3. Financing Fee (Swap)

When you keep leveraged positions open overnight, you pay or receive a daily financing fee called a swap. These charges stem from borrowing costs and fluctuate depending on the underlying interest rates and broker policies. Swaps can accumulate quickly, especially if trades are held over several nights.

Example of Financing Fee (Swap)

You hold a leveraged silver CFD position overnight. The broker charges a swap rate resulting in a £1.20 fee per night. If you hold this position for five nights, your cost is 5 x £1.20 = £6.

4. Inactivity Fee

If you don’t use your trading account for a defined period (typically several months), a monthly inactivity fee may apply. This is meant to cover administrative costs for dormant accounts.

Example of Inactivity Fee

After six months without any trades or account activity, your broker charges a £10 per month inactivity fee. If your account is dormant for three months, you pay 3 x £10 = £30 in inactivity fees.

5. Withdrawal Fee

When you transfer money from your brokerage account to your bank, a withdrawal fee may be deducted. This can be a flat rate or vary based on the withdrawal method or amount.

Example of Withdrawal Fee

You want to withdraw profits from your trading account. The broker charges a flat £5 fee per withdrawal. If you make 2 withdrawals in a month, you pay 2 x £5 = £10 in withdrawal fees.

Understanding and carefully factoring in these common fees can have a significant impact on your commodity trading profitability. Always review the detailed fee structure provided by your broker before you start trading.

Live commodity prices

What taxation applies to income from raw materials in the UK?

Investing in commodities can take a variety of forms, ranging from derivatives and funds to physical assets. In the UK, the tax treatment of income and gains derived from such investments depends on the structure of the instrument (such as CFDs, futures, ETFs, company shares, or physical metals) and specific HMRC guidance. Typically, most returns from commodity investments fall under capital gains or income tax rules, with particular regimes according to the product type. Being familiar with the applicable fiscal frameworks is key to optimising net returns and remaining compliant.

CFDs (Contracts for Difference) and futures are generally considered as speculative instruments. For individual investors in the UK, profits from these products are typically taxed either as capital gains or as trading income, depending on the frequency and intent of trading. Occasional investors or those using leverage might fall under CGT rules, with an annual tax-free allowance (the CGT annual exempt amount). If the activity is classified as "trading," net profits are taxed as income, in line with income tax bands. Importantly, neither CFDs nor futures are subject to stamp duty.

Commodity ETFs (Exchange Traded Funds) track commodity prices or indices. The taxation depends on the jurisdiction and structure of the ETF. For most UK-domiciled ETFs, gains are subject to CGT, benefiting from the annual exemption. However, for some offshore funds not holding ‘reporting fund’ status, all gains may be taxed as income. Furthermore, some ETCs (Exchange Traded Commodities) which are structured as debt securities may attract income tax rather than CGT. It's essential to check the ETF's tax reporting status before investing.

Shares in mining or oil companies are taxed similarly to any other equities in the UK. Gains realised on disposals are subject to CGT, with the potential to offset losses from other shares. Dividends received from these companies are also taxable, but benefit from the UK dividend allowance. Share purchases incur a 0.5% stamp duty, but not for AIM-listed stocks. Investors should keep records of acquisition and disposal dates to determine holding periods and calculate taxable gains.

Physical precious metals such as gold and silver are treated differently. Investment gold (typically bullion and coins meeting specific purity standards) is exempt from VAT at the time of purchase. Silver, platinum and other precious metals remain subject to VAT. When disposing of metals, gains above the CGT allowance are taxable at standard rates. CGT liability can sometimes be mitigated if the metals are legal tender coins (such as Britannias or Sovereigns for gold), which are exempt from CGT.

In all cases, investors should keep accurate records, consider the impact of allowances, and be aware of reporting requirements. HMRC guidance evolves, and the tax status can depend on individual circumstances and the precise product structure.

Raw materials: understanding the Contango and Backwardation effect

When analysing commodity markets, it's crucial to understand the concept of the price curve: the relationship between spot prices (the price to buy a commodity for immediate delivery) and futures prices (the prices set today for delivery at a future date). The shape of this curve—whether it slopes upwards or downwards—gives key signals about the market’s balance, expectations, and pressures. The two most common configurations, contango and backwardation, directly affect investment decisions and the performance of financial products tracking these markets.

Contango: a future more expensive than the present

Contango describes a situation where futures prices for a commodity are higher than the current spot price. In other words, buying the commodity today (spot) is cheaper than locking in a purchase for a future date (futures market). This upward-sloping curve is typical for storable commodities like oil, metals, or wheat.

The main causes of contango are the costs associated with holding (or “carrying”) the commodity until delivery: storage fees, insurance, and financing costs (i.e., the interest you lose by having money tied up in physical stock rather than elsewhere). Participants are willing to pay more for future delivery to cover these expenses. Contango is often a sign that supplies are sufficient—there’s no rush to buy now, so traders can afford to pay a premium for later delivery.

Example: Oil in contango during surplus

Imagine a period when global oil production significantly exceeds demand, resulting in surplus inventories. Storage tanks begin to fill, and storing this oil incurs costs. If the spot price of oil is $70 per barrel, futures contracts for delivery in six months might be $75. This contango reflects the extra cost to hold and insure the oil. Investors rolling from an expiring contract into a new one “pay” this difference, which can eat into returns.

Backwardation: when urgency takes over

Backwardation is the opposite scenario: futures prices are lower than the current spot price. The curve slopes downwards, signalling that the market values immediate delivery significantly more highly than future contracts. This is usually the result of acute demand, low inventories, or concerns about short-term shortages—factors which make having access now more valuable than waiting.

Causes of backwardation include supply disruptions (such as weather events, conflicts, or logistical issues), strong short-term demand, or perishable commodities that are difficult to store. Backwardation is a classic sign that buyers are willing to pay a premium to secure supply as soon as possible.

Example: Wheat in backwardation during the Ukraine conflict

During the early months of the war in Ukraine, global wheat markets experienced sudden fears of supply disruption, as Ukraine is a major exporter. Wheat spot prices surged, while futures prices for delivery months ahead were notably lower. The market’s message: securing wheat right now was worth paying extra for, given the uncertainty over future shipments.

Why does this matter for investors?

Understanding whether a commodity is in contango or backwardation is essential for anyone investing in commodity-based financial products, such as ETFs, ETCs, or commodity funds. These products often gain exposure via rolling futures contracts—that is, selling an expiring contract and buying a new, further-out contract.

In contango, rolling involves repeatedly “buying high, selling low,” since future contracts cost more than spot, which can gradually erode performance (a phenomenon known as negative roll yield). In backwardation, the opposite can occur: rolling may result in “buying low, selling high,” boosting returns relative to the price change in the underlying commodity. Thus, the shape of the price curve can materially influence the real return investors achieve, independently of whether the spot price itself rises or falls.

Good to know: In summary

Analysing the commodity price curve—whether it shows contango or backwardation—offers valuable insights into market dynamics, expectations, and hidden costs or opportunities for investors. Recognising these configurations can help investors decode market signals, anticipate potential risks or rewards, and refine their investment approach accordingly.

Charlotte Green

Charlotte is a finance content specialist with a sharp analytical mind and a strong academic background. She holds a degree in Philosophy, Politics and Economics (PPE) from the University of Oxford and a Master’s in Behavioural Economics from the London School of Economics. Her academic training gave her the tools to make sense of complex financial systems—and to explain them in a way that’s both smart and relatable. Before joining HelloSafe, Charlotte worked in editorial roles for financial media and strategy firms, where she focused on personal finance, digital banking, and policy analysis. She is passionate about helping people make informed decisions about their money, especially in an age where the financial landscape is changing fast. At HelloSafe, she covers key topics such as insurance, tax, utilities, credit and budgeting tools. Her mission: provide clear, honest and actionable insights that empower readers to take control of their financial lives with confidence.