Commodities Market Today | Oil Down 1% on US Demand Drop

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The commodities market today reacts to the anticipated US inflation data. The 10-year yield sharply rose to 4.614% while the dollar index rose to 105.10. US crude dropped 1% with Brent settling at $83.60/barrel, while spot gold fell to $2,338.43/ounce.

Top News and Events

  • Dollar Strengthens Ahead of Inflation Data: The US dollar strengthened before key inflation figures, backed by expectations of delayed interest rate cuts by the Federal Reserve, with the Dollar Index up 0.5% at 105.10.
  • Treasury Yields Rise Amid Poor Auction Results: US Treasury yields rose as investors reacted to poor auction results, with the 10-year yield hitting 4.614%, while the 2-year yield reached 4.975%.
  • Oil Prices Drop on Weak Demand and Economic Concerns: Oil prices dipped 1% due to concerns about weak US gasoline demand and economic data potentially prolonging higher interest rates, with Brent settling at $83.60 a barrel and WTI at $79.23.
  • Gold Prices Fall Due to Dollar Strength and Rate Hike Expectations: Gold prices declined on Wednesday due to a stronger dollar, increased bond yields, and hawkish remarks from a Federal Reserve official ahead of Friday's US inflation data, with spot gold at $2,338.43 per ounce and US gold futures at $2,361.50, down 0.7%.

Prices of Popular Commodities

The day’s rate of Gold, Silver, Natural Gas, Crude Oil (Brent), Crude Oil (WTI)

























Note: Stats/Prices updated as of May 30, 2024, at 9:04 AM.

Source: Moneycontrol

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

What are the potential risks associated with commodities trading?

Answer Field

Risks include price volatility, leverage risk, liquidity risk, regulatory risk, geopolitical risk, and risks specific to individual commodities such as weather-related risks for agricultural commodities or geopolitical tensions for energy commodities.

Are there any specific regulations governing commodities trading?

Answer Field

Yes, commodities trading is subject to regulations imposed by regulatory authorities such as the Commodities Futures Trading Commission (CFTC) in the United States and similar bodies in other jurisdictions. These regulations aim to ensure fair and transparent trading practices.

How can I manage risk when trading commodities?

Answer Field

Implement risk management techniques such as setting stop-loss orders, diversifying your portfolio, avoiding over-leveraging, and staying informed about market developments and news that may impact commodity prices.

What are some common trading strategies in commodities markets

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Popular strategies include trend following, range trading, spread trading, and fundamental analysis-based approaches. Each strategy has its own set of rules and techniques suited to different market conditions.

What is leverage in commodities trading, and how does it work?

Answer Field

Leverage allows traders to control a larger position with a smaller amount of capital, amplifying both potential profits and losses. While leverage can magnify returns, it also increases risk, so it's crucial to use it judiciously.

How do I choose which commodities to trade?

Answer Field

Consider factors such as market trends, supply-demand dynamics, geopolitical developments, and your risk tolerance when selecting commodities to trade. Conduct thorough research and analysis to identify opportunities.

Can I trade commodities without owning the physical assets?

Answer Field

Yes, through derivatives such as futures contracts and options, traders can speculate on commodity price movements without owning the physical assets, enabling participation in commodities markets with lower capital requirements.

What are the main benefits of commodities trading?

Answer Field

Commodities trading offers portfolio diversification, a hedge against inflation, potential for profit from price fluctuations, and exposure to global demand trends.

How does commodities trading differ from stock trading?

Answer Field

While stock trading involves buying and selling shares of publicly traded companies, commodities trading deals with the exchange of physical goods or raw materials. Additionally, commodities are often subject to supply and demand dynamics rather than company performance.

What exactly are commodities?

Answer Field

Commodities are raw materials or primary agricultural products traded on dedicated exchanges. They can be categorised as hard commodities (e.g., gold, oil) or soft commodities (e.g., coffee, cotton).

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