Finance Dictionary
Commodity
Definition
A basic good used in commerce that is interchangeable with other goods of the same type.
Deep Dive
A commodity is a basic good used in commerce that is interchangeable with other goods of the same type, regardless of who produced it. These are raw materials or primary agricultural products that are standardized in quality and can be bought and sold on commodity exchanges. Their prices are determined by global supply and demand dynamics, making them highly sensitive to economic conditions, geopolitical events, and environmental factors.
Examples & Use Cases
- 1Crude oil
- 2Gold
- 3Wheat
- 4Coffee
Related Terms
Futures ContractSupply and DemandRaw Material