Investing term

What is Commodity?

A raw physical good like gold, oil, wheat, or copper — priced by the ounce, barrel, or bushel.

A commodity is a raw physical good — gold, oil, wheat, copper — priced per standard unit like an ounce, barrel, or bushel. Commodities produce no earnings or interest; their price is driven by supply and demand alone. Some investors hold a little (often gold) as a hedge, since commodities can rise when stocks or currencies are under stress.