Learn the stock market › The economy and the stock market › Lesson 6 of 6
What are commodities?
Kinds of commodities
- Energy: oil, natural gas and coal. Brent is a price for North Sea oil that much of the world's oil is priced against.
- Metals: gold and silver, which people also buy to hold value, and industrial metals like copper and iron ore.
- Agriculture: wheat, corn, coffee and sugar.
A barrel of oil from one country is much the same as a barrel from another, so they can trade in large standard contracts. Most trading is in futures, agreements to buy or sell a set amount on a set day. The prices here are for the contract closest in time.
Oil and gold against the stock market
| What | Latest close | 1 year | Per year, 10 years | Largest fall |
|---|---|---|---|---|
| Oil, Brent, dollars a barrel | 98.32 | +55% | +8.0% | −87% |
| Gold, dollars an ounce | 4,075 | +2% | +12.1% | −44% |
| S&P 500, points | 7,377 | +10% | +13.5% | −57% |
We have Brent since 2007 and gold since 2000. The largest fall runs from the highest close so far to the lowest close after it. Oil fell 87% from July 2008 to April 2020. Gold fell 44% from August 2011 to December 2015. The S&P 500's largest fall since 2000 was 57%.
Commodities pay no dividends and earn no profits. The price is only what buyers and sellers agree on, and it can swing hard when supply or demand changes. A company can grow and pay out cash; a commodity cannot.
Commodities and stocks
Commodities reach the stock market in two ways. For companies that sell them, like miners and oil producers, profits often follow the price. For companies that buy them, like airlines and manufacturers, they are a cost. Commodity prices are also part of inflation: dearer energy makes much else dearer, as in What is inflation?.
Test yourself
Why can't the price of gold grow the way a company can?
Prices are in dollars, closes up to Nov 6, 2026.
How did an oil company do? Why did Exxon Mobil move?