Best Commodity Brokers in 2025

Which raw materials can be traded online?

Commodities play a crucial role in both global economics and financial markets. In simple terms, commodities are raw materials or primary products such as oil, gold, wheat, and aluminium, which are traded on dedicated financial markets. Their economic importance is huge: they constitute the building blocks for entire industries, affect the cost of living, and are sensitive to a wide range of factors including supply and demand, geopolitical tensions, climate events, and currency fluctuations.

On the market, commodities are known for their unique behaviour. Prices can be volatile, often swinging sharply with news on weather patterns, changes in production, or global politics. Australia, being a major producer and exporter of resources like iron ore, wheat, and gold, is especially impacted by—and can benefit from—commodity market moves.

Retail investors can access commodities online through several popular financial instruments:

• CFDs (Contracts for Difference): Allow speculation on price movements without owning the physical commodity.
• Futures contracts: Standardised agreements to buy or sell a set amount of a commodity at a predetermined price and date.
• ETFs (Exchange-Traded Funds): Funds that give exposure to a basket of commodities or specific raw materials, traded like shares.

Understanding each commodity’s market characteristics and available investment tools is key to building a balanced portfolio or making tactical trades.

Investing in Gold

Gold remains the classic “safe haven” asset. Its price tends to rise during economic or geopolitical uncertainty, making it popular for preserving wealth over the long run. For Australians, gold offers both a global market exposure and a hedge against currency fluctuations. Online investors commonly use gold ETFs for simplicity or CFDs/futures for active trading.

Investing in Oil (Brent Crude)

Oil markets are renowned for their volatility, influenced by OPEC decisions, geopolitical conflicts, and economic cycles. Brent crude, the main international benchmark, reacts quickly to news events. Oil trading suits risk-tolerant investors ready to monitor markets closely. CFDs and futures allow high leverage, but also require strong risk management.

Investing in Natural Gas

Natural gas is one of the most volatile commodities, with prices swinging based on seasonal demand, weather forecasts, and supply shocks. This market is best suited to those with trading experience and a strong tolerance for price swings. Futures and CFDs are the most accessible tools online but require diligent monitoring.

Investing in Aluminium

Aluminium sits between precious and base metals. Its price depends on global industrial demand, especially in transportation and construction. This makes it attractive for industry-aware investors or those seeking exposure to economic recovery themes. ETFs provide broad exposure; CFDs/futures allow for direct trading.

Investing in Grains (Wheat, Corn, Soybeans)

Grain commodities like wheat, maize, and soybeans are key to the food and feed industries. Prices are highly sensitive to weather events (droughts, floods), government policies, and export data. Investors often look at grains for portfolio diversification and as protection against inflation. Futures are commonly used, but ETFs and CFDs provide simpler alternatives.

How to invest in commodities?

Several methods are available to invest in commodities, each with their own characteristics, levels of risk, and investment horizons. Whether you are looking for dynamic short-term trading or stable long-term diversification, commodities—ranging from energy to precious metals and agriculture—can be accessed through a variety of financial instruments, not just by physically owning the raw product. Understanding these options is key to choosing the right strategy for your goals and profile as an investor in Australia.

Invest via CFDs (Contracts for Difference)

CFDs allow you to speculate on the price movements of commodities without owning the underlying asset. With CFDs, you enter a contract with a provider to exchange the difference in the price of a commodity between when the contract is opened and closed. They are often used for short-term trading and provide the advantage of leverage, meaning you can take positions larger than your initial investment. However, leverage also amplifies losses, and CFDs can carry significant risk, including the loss of more than your initial deposit, particularly if markets move sharply.

Example: CFD on Crude Oil

Suppose Brent crude oil is trading at $80 per barrel. You open a CFD to buy 100 barrels with a margin of 10%, so you only deposit $800. If oil rises to $82, you earn $200 (100 x $2). If it falls to $78, you lose $200. Changes are magnified due to leverage.

Invest via Futures Contracts

Futures involve agreements to buy or sell a specific amount of a commodity at a predetermined price and future date. They are actively used by both speculators and producers to hedge against price changes. Futures contracts are standardised and traded on exchanges, and require a margin deposit. While they can offer profit opportunities from both rising and falling prices, they also expose you to potentially substantial losses if the market moves against you.

Example: Wheat Futures Contract

You enter a contract to buy 10 tonnes of wheat at $300 per tonne for delivery in three months. If, at expiry, wheat trades at $320/tonne, your contract is worth $200 more per tonne ($2,000 total). If it drops to $280, you lose $2,000.

Invest via ETFs (Exchange Traded Funds)

ETFs provide indirect, diversified exposure to commodities. An ETF can track the price of a single commodity (like gold) or a basket (such as a broad commodity index). Traded on the ASX and global exchanges, ETFs are easy to buy and sell, and are suitable for investors seeking hands-off diversification without dealing with physical delivery or futures rollovers. ETFs typically track spot prices using futures, physical holdings, or swaps.

Example: Gold ETF

You invest $5,000 in a gold ETF listed on the ASX tracking spot gold. If gold’s price rises by 10%, your ETF investment grows to $5,500, less fees and tracking error.

Investing in Commodity-Linked Stocks

Buying shares in companies that produce, process, or transport commodities is an indirect investment in the sector. The share price of miners, energy producers, and agribusinesses often correlates with commodity prices, but can also be affected by company performance, costs, or regulatory issues. This method blends commodity exposure with the benefits and risks of equity investing.

Example: Buying Shares in a Mining Company

You buy $2,000 shares in an Australian gold mining company. If the gold price increases and the company reports strong production, shares may rise, providing capital gains. Weak gold prices or operational issues could depress the stock regardless.

Invest in Physical Commodities

This traditional approach involves directly buying and holding the commodity itself—such as bullion bars or coins for precious metals. Physical investment offers the security of tangible ownership and a potential hedge against inflation or currency risk, but also comes with storage, insurance and liquidity challenges. It is mainly practical for precious metals, with agriculture and energy products rarely suited for direct ownership by private investors.

Example: Buying Physical Gold

You purchase a 50g gold bullion bar from a reputable Australian dealer for $4,000. You store it securely at home or in a bank safety deposit box. Gold’s price climbs to $4,200 for the same bar—capitalising the gain is as simple as selling to a dealer, though there may be a small spread.

Each approach offers a different profile for risk, liquidity and exposure to the commodities market. Whether aiming for speculative gain or long-term preservation of purchasing power, be sure to choose the method that aligns with your investment strategy and comfort level.

Which raw material according to your investor profile?

Not all commodities behave in the same way—while some are relatively stable and predictable, others are subject to sharp price movements, geopolitical factors, or weather events. Selecting the right commodity investment depends largely on your experience level, understanding of market risks, and preferred investment strategies. Here’s a simple guide to help you match your investor profile to the most suitable commodities.

🟢 Beginner: stable and predictable commodities

If you are new to commodities investing, it's best to start with assets that offer lower volatility and well-established markets. Gold and aluminium stand out for beginners because:

• Gold:
• Historically stable with relatively low daily price swings.
• Widely used as a safe haven during economic uncertainty.
• Simple to follow, with plenty of resources available to learn the basics.
• Aluminium:
• Used in diverse industries, supporting stable demand.
• Less exposed to sudden geopolitical shocks compared to energy commodities.

Recommended beginner strategies

• Invest through Exchange Traded Funds (ETFs) for diversification and ease of access.
• Use Contracts for Difference (CFDs) with minimal leverage to limit risk.
• Avoid day trading or high-frequency strategies—focus on holding for the medium to long term.

🟡 Intermediate: more dynamic assets exposed to current events

At the intermediate level, you can handle more volatility and start to take advantage of market news. Oil and grains are good fits because:

• Oil:
• Prices react quickly to global news, especially geopolitical developments.
• High liquidity, allowing for frequent trading opportunities.
• Grains (such as wheat, corn, soybeans):
• Prices affected by seasonal patterns, weather, and global supply-demand.
• Possibility to capture larger price moves if you follow market fundamentals.

Recommended intermediate strategies

• Monitor economic and market news regularly.
• Use swing trading tactics on CFDs or ETFs, holding positions from a few days to weeks.
• Always apply stop-loss orders to protect against sudden adverse movements.

🔴 Expert: highly volatile assets sensitive to external factors

Expert investors are comfortable with fast-moving markets and advanced techniques. Natural gas, short-term oil, and actively traded grains require:

• Natural Gas:
• Extremely volatile with price swings driven by weather, infrastructure, and political issues.
• Sensitive to both global and regional developments.
• Short-Term Oil and Grains Trading:
• Best suited for those able to track intraday or short-term news and data.
• Requires quick decision-making and precise execution.

Recommended expert strategies

• Apply scalping and short-term trading methods to capture intraday movements.
• Use advanced technical indicators to inform entry and exit points.
• Consider hedging and leverage management tools to navigate sharp price changes.
• Maintain strict risk management, as losses can be rapid and significant in these markets.

By aligning your commodity investments with your experience and risk appetite, you’ll be better positioned to manage volatility and seize opportunities that match your skillset.

How to choose a broker to trade commodities?

Choosing the right broker is a crucial step for anyone looking to trade commodities effectively and securely. The broker you select will directly impact your access to markets, the costs you incur, and the safety of your investments. In Australia, investors benefit from a well-regulated environment, but it remains essential to carefully evaluate each broker on key criteria to protect your funds and optimise your trading experience. Use the following checklist to make an informed choice based on your needs and the specificities of commodity trading.

Why invest in commodities?

The place of commodities in an investment portfolio often sparks debate: are they truly essential, or simply an added risk? While commodities are sometimes overlooked in traditional asset mixes, they arguably deserve a spot in a well-considered strategy — though not without understanding the nuances of their behaviour and impact.

Adding commodities to a portfolio can be a powerful way to diversify. Unlike shares or bonds, commodities tend to be influenced by distinct supply-and-demand dynamics, global weather events, and geopolitical developments. Their price movements often show lower correlation with traditional financial assets. When equities or bonds experience downturns, some commodities may hold steady or even perform well. For investors, this potential for differentiated returns can reduce overall portfolio volatility and contribute to a more balanced risk profile.

Commodities also offer a natural hedge against inflation. Historically, the prices of key raw materials — such as grains, energy, or industrial metals — have tended to rise during inflationary periods. Since inflation often drives up the costs of goods and services, having a portion of your portfolio tied to commodities may help preserve purchasing power. While this relationship is not absolute, it supports the idea that commodities can act as a useful defence when inflation is on the rise, a concern that matters for Australian investors facing cycles of rising living costs.

Within the commodity universe, precious metals like gold and silver hold a unique status. These assets have long been viewed as “safe havens”, especially in times of economic or geopolitical uncertainty. When traditional markets become turbulent, investors tend to seek shelter in instruments with intrinsic value and historical stability. Incorporating a measured allocation to precious metals may serve as a portfolio shock absorber, helping to cushion against severe market downturns or moments of crisis.

Some commodities also present tactical opportunities for more active investors. For example, energy products such as oil are particularly sensitive to geopolitical developments, supply disruptions, or policy changes. With careful analysis and clear risk management, it is possible to take advantage of short- or medium-term price fluctuations in response to specific events. However, the volatility and complexity of these markets demand an informed and disciplined approach.

Key takeaway

Commodities are not a guarantee of performance, nor do they replace more traditional investments. However, when used thoughtfully, they represent a strategic lever for building a resilient, diversified portfolio. Their ability to provide diversification, potential inflation protection, and safe-haven qualities justifies their inclusion — always with a clear understanding of the risks involved and in the context of broader investment objectives.

How much does trading commodities cost?

When you trade commodities, several different fees and costs can affect your final profits or losses. The main types of fees include the spread (the difference between the buy and sell price), transaction commissions, funding or swap fees for holding positions overnight, inactivity fees if you leave your account dormant, and withdrawal fees when you take funds out. Understanding these costs is essential for anyone who wants to optimise their returns and avoid unnecessary losses, as they can add up and significantly impact your trading performance.

1. Spread

The spread is the built-in cost that comes from the difference between the price you can buy a commodity (ask) and the price you can sell it (bid). This fee is how brokers or trading platforms make money even if they do not charge a direct commission. The spread is usually measured in AUD per unit (e.g., per ounce of gold or per barrel of oil) and can fluctuate depending on market volatility and the commodity you trade.

Spread Example

Suppose you're trading gold. The platform quotes a buy price of AUD 2,700 per ounce and a sell price of AUD 2,695 per ounce. If you buy one ounce and immediately sell, the spread cost is AUD 5. If you expect to make a profit, your trade must earn more than this spread first.

2. Transaction Commission

Some brokers charge a direct commission every time you open or close a trade. This can be a flat rate or a percentage of the trade’s value. Commissions are in addition to spreads and can particularly impact frequent traders, as the fees add up with every transaction.

Example of Transaction Commission

Imagine you want to buy and later sell crude oil contracts. The broker charges AUD 4 per trade per contract. If you buy one contract and then sell it later, you will pay AUD 8 in total commissions: AUD 4 to open and AUD 4 to close.

3. Funding Fee (Swap)

A funding fee, often called a swap, is charged if you hold a position overnight. This reflects the cost of leverage—borrowing money from the broker to maintain your position. Swaps are charged daily and their amount depends on the size of your position, the commodity, and current interest rates.

Example of Funding Fee (Swap)

You are holding an open wheat position overnight. The broker applies a swap rate of AUD 1.50 per contract per night. If you hold 3 contracts for 2 nights, your total funding fee will be 3 contracts × 2 nights × AUD 1.50 = AUD 9.

4. Inactivity Fee

Brokers may charge an inactivity fee if you do not trade or log in for a certain period, usually a few months. This fee encourages traders to stay active, and can sometimes catch investors who use a “buy-and-hold” strategy by surprise.

Example of Inactivity Fee

If you do not make any trades or log into your account for 3 months, your broker charges you AUD 15 as an inactivity fee. Even if you only have AUD 100 in your account, this fee will be deducted automatically.

5. Withdrawal Fee

A withdrawal fee is charged each time you transfer funds out of your trading account. This fee is usually a fixed amount and is deducted from the amount withdrawn. Knowing this fee can help you plan fewer, larger withdrawals rather than frequent small ones.

Example of Withdrawal Fee

You request to withdraw AUD 500 from your account. The broker charges a AUD 2.50 withdrawal fee. You will receive AUD 497.50 in your bank account, as AUD 2.50 is deducted for the transaction.

By understanding each type of fee and factoring them into your trading plan, you can more accurately assess potential profits and avoid surprises that eat into your returns. Always check your broker’s fee schedule before you start trading.

Live commodity prices

What is the taxation on income from raw materials in AU?

Investing in commodities can be done through various financial instruments such as derivatives (like CFDs and futures), ETFs, mining or energy stocks, or by directly holding physical metals. In Australia, the taxation of returns from commodities investments depends on both the underlying asset and the structure of the product. Most commodity-related gains are treated as investment income (capital gains or income), but the precise tax treatment can differ significantly depending on the instrument and your individual circumstances. Below is a comparative overview of the main tax regimes applicable in Australia to the different ways of investing in commodities.

CFDs and futures are typically considered derivative financial products in Australia. Profits (or losses) realized by individuals from trading in these instruments are usually taxed as ordinary income and should be declared in your annual tax return. Losses incurred may generally be deducted against other income, subject to specific rules. For high-frequency traders or businesses, the treatment may fall under business income, which is taxed at marginal rates. No CGT discount applies to trading derivatives.

Commodities ETFs (Exchange-Traded Funds) provide exposure to commodities such as gold, oil, or a basket of raw materials. In Australia, gains from the sale of ETF units are generally subject to Capital Gains Tax (CGT). If held for more than 12 months, individuals may be eligible for a 50% CGT discount. Income distributed by ETFs (e.g., interest, dividends) will also be taxed as ordinary income according to your tax rate.

Shares in mining or petroleum companies are common ways for Australian investors to gain indirect exposure to commodities. Profits from the sale of these shares are subject to CGT, with a 50% discount for individuals after 12 months of continuous holding. Dividends received from Australian companies may benefit from franking credits, which offset the tax paid at the corporate level, reducing the effective tax rate for investors.

Physical precious metals—such as gold or silver bars held outside the financial system—are also considered CGT assets. When you sell such metals, any capital gains will generally be subject to CGT, with the potential 50% discount for assets held over 12 months. In rare cases, precious metals held purely for personal use may be exempt as “personal use assets,” but investment-intent holdings typically do not qualify for this exemption. Note that GST may also apply on acquisition and sale, unless specific exemptions (such as investment-grade gold) are met.

In summary, the tax regime applicable to commodity returns in Australia depends both on the form of the investment and on the individual's holding period and circumstances. Tax efficiency can often be improved through long-term holding and, where available, optimisation of available discounts and credits. As with any investment matter, personal circumstances will determine final tax outcomes—consultation with a qualified tax adviser is recommended.

Raw materials: understanding the Contango and Backwardation effect

Understanding Price Curves in Commodities: Why Market Shape Matters

In commodity markets, prices exist for both immediate delivery (spot price) and future delivery (futures price). If you look at these prices over time, you get what's called a price curve. The shape of this curve—whether it slopes upward (contango) or downward (backwardation)—is more than just a technical detail. It gives key clues about market expectations and directly affects the performance of financial products such as ETFs and funds that invest in commodity futures. For Australian investors following everything from wheat to copper, recognising these patterns helps make more informed decisions in a fast-moving environment.

Contango: When Future Prices Are Higher Than Today’s

A market is in contango when futures prices are higher than the current (spot) price. In simple terms, buyers are willing to pay more today for commodities they’ll receive in the future. This situation is most common with commodities that can be stored, like oil, metals, or grains.

What causes contango?

• Storage costs: Holding a physical commodity incurs warehousing, insurance, and spoilage costs.
• Financing costs: Tying up money in stored goods means missing other opportunities.
• Carrying costs: Sometimes include licensing, regulations, or taxes.

All these factors mean that future prices need to compensate holders for these expenses, leading to an upward-sloping curve.

Example: Oil in Contango During Surplus

Imagine a period when oil supply exceeds demand, like during certain months in 2020. Storage tanks fill up, and companies pay fees to keep oil stored for future sale. The cost of storing oil pushes future (futures) prices above the current price, creating contango. Investors rolling over futures contracts in this environment could face extra costs.

Backwardation: When There’s No Time to Wait

Backwardation is the opposite. Here, the futures price is below the spot price. This often happens when there’s a sudden shortage or urgent demand for a commodity. Buyers are willing to pay a premium to secure immediate delivery, signalling tightness in the market.

What drives backwardation?

• Supply disruptions: Due to weather, geopolitical events, or transport issues.
• Unexpected demand spikes: For example, food shortages or increased industrial activity.
• Low inventories: When stockpiles are diminishing, immediate supply becomes more valuable.

Backwardation reflects a market that wants commodities now, not later.

Example: Wheat Backwardation During the Ukraine War

When conflict disrupted Ukrainian wheat exports—crucial for global supply—buyers scrambled to secure shipments, driving up spot prices rapidly. But futures prices remained lower, as markets expected future crops or alternative routes to ease shortages. In this period, wheat markets often showed backwardation, rewarding those who held contracts for prompt delivery.

Why Does This Matter for Investors?

For investors using products like ETFs, ETCs, or managed funds that track commodity prices by rolling from one futures contract to the next, the shape of the curve makes a real difference:

• In contango, rolling from an expiring contract to a more expensive future contract regularly means “buying high and selling low,” which can drag down returns.
• In backwardation, rolling means “selling high and buying low,” potentially resulting in positive returns even if the underlying spot price stays flat.

This effect, called “roll yield,” is critical in understanding why the performance of a commodity fund can differ from the actual commodity price—sometimes significantly.

Good to Know: In Summary

Analysing the shape of the commodity price curve (contango or backwardation) is essential for investors. It helps reveal current supply-demand dynamics, market expectations, and potential costs or benefits from holding commodity-based financial products. Keeping an eye on these signals enables better strategy adjustments—an important advantage in navigating volatile commodities markets, whether you’re tracking oil, wheat, or metals.

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.