3.8.5. Commodities
Recall that a commodity is a product that doesn’t vary much among producers and, therefore, can be standardized. Commodities are usually divided into two types: hard and soft commodities. Hard commodities are usually natural resources that need to be extracted from the earth, including oil, gas, and precious metals. Soft commodities are usually agricultural products or livestock, such as corn, cattle, and apples. Commodities can be consumed directly or used to produce other products.
Individuals who want to invest in commodities can buy them directly in bulk, as with gold bullion, but most do not. Inst