Oil, Wheat and Gold
Oil, wheat and gold are raw materials, and their prices can jump around.
The idea
A commodity is a raw material like oil, wheat, gold or copper. One barrel of oil is basically the same as another barrel, so buyers mostly compare on price. Prices move when supply or demand changes: a bad harvest, a new oil field or a sudden rush of buyers can swing them quickly. Because of that, commodity prices tend to be bumpier than the prices of many other things people invest in. 🛢️
Words to know
- Commodity
- A raw material like oil, wheat or gold, where one unit is much like another.
- Raw material
- Stuff that gets grown, dug up or pumped before anything is made from it.
- Supply
- How much of something is available to buy.
- Demand
- How much of something people want to buy.
- Barrel
- The unit oil is measured and priced in.
Try it — no account needed
True or false about commodities?
Oil, wheat, gold and copper are all commodities.
In the full lesson
- 1True or false
- 2Put it in order
- 3Make the call
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