Summary: Commodities, encompassing a broad array of raw materials from metals to agricultural products, are a popular avenue for investors seeking diversification or a hedge against inflation. One of the simplest and safest ways to invest in commodities is through a regulated online broker like eToro. Keep reading as we investigate the top 5 commodities to invest in 2025.
Best Commodities Broker for Intermediate Traders and Investors
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Invest in 30+ commodities and 3,000+ other assets including stocks and cryptocurrencies.
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0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
5 best commodities to invest in 2025
The practice of trading commodities dates back to the annals of human history, outdating the trading of stocks and bonds by several centuries, as ancient tribes and nascent kingdoms would barter and trade with each other, exchanging food, supplies, and other items.
In our modern era, the trading of commodities continues unabated, magnified significantly in its scale and global reach, and there are more options for participating in the commodity markets than ever before (we’ll get into that later).
But for now, here are five commodities you should consider adding to your portfolio in 2025.
#1 Oil
Oil is an essential global commodity, serving as the primary energy source for transportation and a key component in manufacturing processes. In fact, any fluctuations in its price can trigger ripple effects through the broader economy.
Supply and demand dynamics is the primary factor driving the cost of crude oil. Prices tend to decrease when there is an excess supply and diminished demand. Conversely, prices tend to increase when demand rises, and supply is scarce. Alterations in perceived supply and demand can be influenced by geopolitical events (e.g., Russia’s invasion of Ukraine) or natural catastrophes (e.g., the Covid-19 pandemic) that affect oil-producing nations.
To the investor, oil can be a speculative asset, a portfolio diversifier, as well as a potential hedge against inflation. It’s important to note that oil is known for its inherent volatility. As such, investing in oil requires careful consideration of market trends, risk management strategies, and a thorough understanding of the factors impacting its price.
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
#2 Base metals
Base metals, such as aluminum and zinc are essential commodities widely used in commercial and industrial applications, including construction and manufacturing. They are relatively inexpensive compared to precious metals, and their global availability ensures a generally stable supply. However, increasing demand—particularly from China and other emerging markets—is driving price growth, making them an attractive investment in 2025.
According to Retuers, in 2025, aluminum is expected to be the best-performing base metal, with analysts forecasting a 6.3% price increase to $2,573.50 per metric ton due to a supply shortfall driven by China’s smelter capacity cap.
Zinc follows with a projected 4.2% rise to $2,895 per ton, though its rally may fade as mine supply recovers. Copper is set to rise 3% to $9,425 per ton but faces headwinds from U.S. tariffs on Chinese goods.
Nickel remains under pressure from oversupply but could see gradual recovery, while tin’s outlook is highly uncertain, with forecasts ranging widely. Despite trade tensions, constrained supply in key metals supports a bullish case for investors.
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
#3 Gold
Traditionally a safe-haven asset, gold prices tend to rise when the U.S. dollar weakens or when central banks increase their reserves. In 2024, gold delivered a strong 25.5% return, though a brief correction in October, triggered by rising interest rates and a stronger dollar, temporarily stalled its rally. However, renewed volatility and economic uncertainty have since driven prices higher.
Goldman Sachs now projects gold could reach $3,100 per ounce by year-end, citing strong central bank demand, which is expected to rise to 50 tons per month. If demand surges to 70 tons, prices could climb to $3,200. Additionally, if the Federal Reserve maintains interest rates, gold is forecast to reach $3,060, while rising fiscal risks could push it as high as $3,250—an 11.68% increase from current levels.
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
#4 Cotton
Cotton is a soft, fluffy fiber that grows in a boll around the seeds of the cotton plant, a shrub native to tropical and subtropical regions around the world. It is primarily cultivated for its fiber, which is spun into yarn or thread to create a soft, breathable textile – cotton fabric.
In addition to its textile applications, cotton is essential for a variety of products, including fishing nets, coffee filters, tents, and manufacturing explosives (nitrocellulose). It’s also in use for the production of cotton paper and bookbinding. After ginning the cotton, the remaining cottonseed is used to extract cottonseed oil, while the residual cottonseed meal is repurposed as feed for livestock.
The price of cotton as a commodity can fluctuate based on various factors, including weather conditions, crop diseases, changes in global demand, and geopolitical factors.
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
#5 Wheat
Wheat is a cereal grain that is one of the most important staple foods in the world. Originating from ancient grains in the Middle East, it’s now cultivated worldwide and is the second-largest cereal crop in terms of production, following corn.
The cost of wheat depends on various supply and demand elements, notably the price of oil, global population trends, income growth, geopolitical occurrences impacting key producers (Russia’s invasion of Ukraine that sent wheat prices soaring), the cost of substitute grains, and climatic conditions that can alter supply. That said, the steady demand for it facilitates a stable market for wheat, mitigating the price fluctuations typically linked with other commodities.
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
If you’re looking for commodities not on this list, check out our selection of commodity investing guides here:
- How to Invest in Platinum;
- How to Invest in Copper;
- How to Invest in Coffee;
- How to Invest in Corn;
- How to Invest in Sugar;
- How to Invest in Soybeans;
- How to Invest in Cocoa;
- How to Invest in Rice;
- How to Invest in Lead;
- How to Invest in Cattle;
- How to Invest in Gasoline.
Note
How to invest in commodities: Step-by-step
You can start in minutes with a few simple steps:
- Step 1: Register on eToro and verify your new account (personal or business);
- Step 2: You have to fund your account before you can start buying commodities. Several deposit methods will be available to you, including linking your bank account, using a debit or credit card, as well as employing third-party payment methods like PayPal, Neteller, or Skrill;
- Step 3: Navigate to the commodities markets page, choose a commodity, and select TRADE;
- Step 4: Click on BUY for a long position (or SELL, if you want to go short);
- Step 5: Input the desired cash amount or number of units for your trade;
- Step 6: Review and adjust the stop loss, leverage, and take profit settings;
- Step 7: Click OPEN TRADE.
Disclaimer: 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. This content is not intended for US users. eToro USA LLC does not offer CFDs, only real Crypto assets, Stocks and ETFs are available.
Best Commodities Broker for Intermediate Traders and Investors
-
Invest in 30+ commodities and 3,000+ other assets including stocks and cryptocurrencies.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
Important
There are even more options for investing in commodities, including:
- Commodity ETFs and mutual funds: If you prefer to avoid the risks that fast-paced and margin-dependent derivatives markets present, a practical option is to invest in ETFs that track the commodity giving you diversified exposure to the commodities market as a whole or the commodity you’re interested in;
- Futures contracts: Commodities futures are contracts to buy or sell a specific quantity of a commodity at a specified price on a particular future date. You can trade futures on exchanges and are the most direct method of owning physical commodities. However, they can be highly complex and risky, requiring a much deeper understanding of the market;
- Commodity stocks or ETFs: Buying shares of companies or ETFs in commodity-related industries is another way to invest in commodities. This could mean investing in mining companies for commodities like gold and silver or energy companies for oil and natural gas.
Common mistakes to avoid when investing in commodities
These are the common mistakes that investors should be aware of and hopefully avoid when investing in commodities:
- Lack of research: Every commodity has its unique set of supply and demand dynamics. Before investing in any commodity, it is important to understand its market thoroughly;
- Ignoring the impact of global events: This can include geopolitical conflicts, changes in government policies, global economic trends, and even changes in weather patterns. Ignoring these can lead to miscalculated investment decisions;
- Not diversifying: While commodities diversify a portfolio, it’s also important to diversify within the commodities portfolio itself;
- Chasing trends: Like other investments, it’s usually not a good strategy to invest in a commodity just because its price has been rising rapidly;
- Going overboard with leverage: Leverage amplifies your risk-return ratio, so use it with caution;
- Overexposure: While commodities can be a valuable part of a diversified portfolio, overexposure to commodities can be risky. The thing is—they can be more volatile and less predictable than other types of investments;
- Ignoring the tax implications: It’s essential to understand the specific tax implications in your area.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about commodities
How to invest in commodities?
Various options exist for investing in commodities, including commodity ETFs, commodity-related stocks, and CFDs. These financial instruments offer exposure to the commodity’s price fluctuations without requiring physical ownership of the raw material, accommodating various risk appetites and growth prospects.
Where to invest in commodities?
You can invest in commodities through various online broker services, such as eToro.
Are commodities a good investment?
Commodities are a great way to diversify your investment portfolio, protect against inflation, and potentially profit from global economic growth. However, given their track record of low long-term returns and high volatility, investors choosing to venture into commodities may want to consider keeping their allocations relatively small and well-diversified.
Best Commodities Broker for Intermediate Traders and Investors
-
Invest in 30+ commodities and 3,000+ other assets including stocks and cryptocurrencies.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
