Best Commodity Brokers in 2025

Which raw materials can be traded online?

Commodities are essential raw materials traded globally, forming the backbone of the world economy. On financial markets, a commodity is anything that is largely interchangeable with another item of the same type, like crude oil, gold, or wheat. Trading commodities online allows South African investors to diversify portfolios and hedge risks due to their unique price movements, which are influenced by global supply, demand, geopolitical events, weather, and even currency fluctuations.

Commodities markets operate differently from the stock market. Their prices often move based on changes in production, consumption, inventory levels, and world events. For example, a geopolitical crisis in an oil-producing region can send oil prices soaring. Supply disruptions like droughts or bans affect agricultural prices, while metals respond to industrial activity cycles.

Investors typically access commodities through financial instruments such as:

• CFD (Contracts for Difference): Trade on price movements without owning the physical commodity, often with leverage.
• Futures Contracts: Commit to buying or selling a commodity at a set price and date in the future.
• ETFs (Exchange-Traded Funds): Track an underlying commodity price or a basket of commodities, making them accessible and liquid.

Now, let’s explore the main categories and examples of commodities accessible online.

Invest in Gold

Gold remains the go-to safe haven asset, attractive in times of uncertainty or high inflation. Prices are often stable relative to other commodities, making gold suitable for long-term portfolio diversification. In South Africa, gold exposure is convenient via ETFs or CFDs on trusted platforms.

Invest in Brent Crude Oil

Brent crude oil is among the world’s most traded commodities. Its price is driven by geopolitical news, supply decisions by OPEC, and global economic growth. Oil markets are very liquid but can be volatile, requiring an active approach and good risk management.

Invest in Natural Gas

Natural gas prices are extremely sensitive to seasonal changes and energy policies. For South African investors, it offers opportunities due to its high volatility, but positions should be closely monitored given rapid price swings influenced by weather and supply storage data.

Invest in Aluminium

Aluminium is widely used in industry, especially in construction and transportation, making its price a good indicator of industrial health. The market is sensitive to energy costs and economic cycles. Investors with a view on global industry trends may use aluminium as a cyclical play.

Invest in Agricultural Commodities (Wheat, Maize, Soybeans)

Agricultural commodities such as wheat, maize, and soybeans are fundamental for food supply chains. Their prices respond to crop conditions, weather extremes, global demand shifts, and policy changes. These instruments help diversify a portfolio while tracking global consumption trends—but bear in mind seasonal price swings and sometimes lower liquidity compared to energy or metals.

By understanding the mechanics and unique behaviour of each commodity class, South African traders and investors can leverage these markets to enhance diversification, benefit from global trends, and manage portfolio risk. Always select the instrument and broker that best matches your trading style and risk appetite.

How to invest in commodities?

Several ways exist for investing in commodities, depending on your goals and risk appetite. Whether you are seeking short-term, active trading returns or looking for a stable, long-term store of value, commodities can help you diversify your portfolio. Commodities are physical assets like gold, oil, or agricultural products, but they’re accessible for investors in South Africa mostly through financial products tailored to different strategies. Let’s explore the main ways to invest in commodities and compare their features.

Invest through CFDs (Contracts for Difference)

CFDs are financial instruments that allow you to speculate on the price movement of commodities without owning them. With CFDs, you can trade both rising and falling markets by taking long or short positions. They offer leverage, which means you can gain greater exposure with a smaller deposit, but this also increases risk.

CFDs are mainly used for short-term trading, as they incur overnight financing costs and react rapidly to market events. However, the leverage and possibility to trade on margin make CFDs risky; potential losses can exceed your initial deposit if the market moves against you.

Example: CFD Trading on Oil

Suppose you believe Brent Crude Oil will rise in value. You open a CFD long position at $80 per barrel, with a margin requirement of 10%. If the price rises to $85 and you close your trade, your profit is the difference ($5) multiplied by your contracted quantity. Conversely, if the price drops, your loss is calculated in the same way.

Invest through Futures Contracts

Futures are standardized contracts to buy or sell a commodity at a predetermined price and date. Futures are traded on regulated exchanges and are popular among institutional investors, producers, and advanced individuals for both hedging and speculation.

Investors can use futures to lock in prices (as a hedge against volatility) or to speculate by buying/selling contracts without necessarily taking delivery of the physical commodity. Note that futures involve substantial leverage and require careful risk management.

Example: Wheat Futures Contract

You anticipate wheat prices will rise, so you buy a wheat futures contract for 50 tonnes at $300 per tonne, expiring in three months. If the market price at expiry is $320, you can settle the contract for a gain of $20 per tonne, multiplied by the contract quantity.

Invest through ETFs (Exchange Traded Funds)

ETFs are funds traded on stock exchanges that track the price of a specific commodity or a diversified basket of commodities. ETFs are suitable for investors seeking broad exposure without the complexity of managing futures or physical storage. They can be bought and sold like shares, making them accessible and liquid.

ETFs can track spot prices, futures-based indexes, or collections of companies operating in a sector. They are widely used for long-term positions with transparent pricing and relatively low fees compared to active management.

Example: Gold ETF Investment

You want exposure to gold without holding metal. You buy units of a gold ETF listed on the JSE at R300 per unit. If the spot gold price rises, the ETF unit price adjusts accordingly. You can sell the ETF quickly on the exchange.

Invest in Shares of Commodity-Related Companies

Instead of owning the commodity itself, you can invest indirectly by buying shares of companies involved in mining, energy, or agriculture. The performance of these companies is closely linked to commodity prices, though also influenced by management and operational factors.

Investing in such companies offers stock market liquidity, potential dividends, and growth. However, returns are not perfectly correlated to the commodity, as corporate actions and broader market conditions may affect share prices.

Example: Buying Mining Company Shares

You buy shares of a gold mining company listed on the JSE at R75 each. As gold prices rise, the company’s revenue and share price may increase, giving you capital gains and possibly dividends.

Invest in Physical Commodities

This is the most traditional approach: buying and storing physical commodities such as gold bars, silver coins, or platinum. Physical investment offers security of ownership and acts as a store of value, especially during inflationary periods or market stress. However, it also involves costs (storage, insurance, security) and logistical challenges in buying, selling, and transporting materials.

Example: Physical Gold Purchase

You decide to buy a 1-ounce gold bar from a reputable dealer at R40,000. You store it in a home safe or bank vault. If gold prices rise, the value of your bar increases accordingly. Remember to account for dealer premiums and secure storage.

Each commodity investment method has unique features to suit different investor profiles and objectives in South Africa. Understanding how each works, and their risks and benefits, is essential before deciding on the best fit for your portfolio. Always consider your investment horizon, liquidity needs, and how commodities interact with the rest of your assets.

Which raw material matches your investor profile?

When it comes to investing in commodities, not all assets behave the same. Volatility, returns, and exposure to geopolitical or economic shocks can vary significantly from one commodity to another. That is why your choice should be guided not only by your appetite for risk, but also by your level of experience and understanding of the markets. Properly matching your investor profile to the right commodities can help you make better decisions and avoid unnecessary risks.

🟢 Beginner: Stable and Predictable Commodities

For those just starting with commodity investing, it is best to focus on assets with lower volatility and clearer long-term trends. Gold and aluminium are particularly suitable because:

• Gold: Known for its historical stability and role as a "safe-haven" asset during uncertain times. Gold typically has less dramatic price swings compared to many other raw materials.
• Aluminium: Widely used in industries, with price movements often tied to economic growth, but generally less volatile than energy commodities like oil or gas.

Recommended strategies:

• Invest through ETFs or certificates, which lower direct exposure and make it easier to diversify.
• Use CFDs with low leverage if you wish to take positions, but avoid high leverage to limit risk.
• Steer clear of day trading; favour longer-term or positional holding strategies.

🟡 Intermediate: More Dynamic Assets Influenced by Current Events

If you already have some experience with financial products and are comfortable reading market news, you may be ready to diversify into more dynamic commodities like oil and grains:

• Oil: Prices are highly responsive to global economic indicators, supply agreements, and political conflicts. Oil can offer higher potential returns, but also higher risks.
• Grains (wheat, maize, etc.): These agricultural commodities respond quickly to weather events, crop reports, and international trade policies, adding both opportunity and complexity.

Suggested approaches:

• Consider swing trading with CFDs or ETFs to benefit from medium-term trends.
• Always use stop-loss orders to protect your capital against sudden reversals.
• Keep informed on global news, as both oil and grains can be affected overnight by market-moving events.

🔴 Expert: Highly Volatile Assets Sensitive to External Factors

For experienced investors who have mastered market analysis and risk controls, highly volatile commodities offer significant potential but demand advanced management:

• Natural Gas: Extremely sensitive to weather data, storage reports, and short-term supply/demand shifts, leading to strong price swings.
• Oil (Day Trading): Short-term oil trades require reacting rapidly to breaking news, inventory updates, and economic releases.
• Grains (Short-term Trading): Active strategies on grains involve close monitoring of crop data, weather patterns, and export competition.

Advanced tools and techniques:

• Employ scalping or intraday trading strategies to exploit small but frequent price moves.
• Use advanced technical indicators and charts for identifying trading signals.
• Consider hedging your positions to manage exposure to extreme volatility.
• Apply precise leverage management, never risking more than you can afford to lose given the asset's sharp price movements.

By aligning your commodity choices with your investor profile, you put yourself in the best position to manage risk appropriately and build confidence as you navigate the dynamic world of commodity markets.

How to choose a broker for trading commodities?

Selecting the right broker is a crucial step for anyone looking to trade commodities securely and efficiently. Your broker not only provides access to commodity markets, but also impacts your costs, the range of available assets, and the safety of your funds. For investors in South Africa, understanding the key factors that differentiate brokers will help you make an informed decision and trade with confidence in the energy, metals, or agricultural markets.

By reviewing brokers using these criteria, you position yourself to access commodity markets securely, efficiently, and with the right tools for success.

Why invest in commodities?

Should commodities have a role in a diversified investment portfolio? The question arises frequently, especially for investors in South Africa where local and global dynamics interact. By nature, commodities such as metals, energy, and agricultural products are linked to multiple economic cycles. While they should not be seen as a cure-all, integrating them into a portfolio, with careful consideration, can introduce unique advantages and resilience.

Commodities exhibit price movements that are often distinct from those in the equity and bond markets. For example, while stocks may respond to the profits and outlook of companies, and bonds to prevailing interest rates and credit risks, the value of commodities is primarily based on supply and demand for the underlying physical good. As a result, commodities tend to have a low correlation with traditional asset classes. This characteristic allows them to act as diversifiers—when stocks and bonds decline together, commodities may behave differently, helping to stabilise the portfolio’s value over the long term.

One of the most recognised attributes of commodities is their potential to hedge against inflation. When inflation rises, the cost of raw materials tends to increase, and commodities—especially food products and energy—often move upward in tandem. In practical terms, this means that an allocation to commodities can help counteract the eroding effect that inflation may have on the real purchasing power of an investment portfolio, which is particularly relevant in periods of rising prices in South Africa and globally.

Precious metals such as gold and silver are sometimes referred to as safe haven assets. Their status is rooted in a long history of serving as stores of value that investors turn to during geopolitical unrest, financial crises, or periods of high uncertainty. Adding a measured exposure to precious metals in a portfolio can offer a buffer—when markets falter or confidence wanes, these assets often demonstrate relative stability or even increase in value, thus cushioning the overall risk.

It’s also important to consider commodities as a source of tactical opportunities. Unlike some traditional assets that may require sustained growth over years to yield returns, commodities such as oil, platinum, or copper can respond quickly to unpredictable events: supply shocks, regulatory changes, regional conflicts or shifts in global demand. For investors attentive to these dynamics, commodities can offer windows for potential gains over shorter or medium-term periods, provided that the associated risks are well understood.

Key Takeaway

Commodities are not a guarantee of performance, nor are they risk-free; price volatility can be high and trends can reverse suddenly. However, integrated appropriately, they can serve as a strategic building block of a robust portfolio, offering diversification, inflation protection, and tactical opportunities—qualities that are especially relevant for South African investors navigating an ever-evolving economic landscape.

How much does commodities trading cost?

When trading commodities, several fees can impact your costs and, ultimately, your profit. The most common costs are the spread (the difference between buying and selling prices), transaction commissions, swap or overnight financing fees, inactivity fees, and withdrawal fees. Understanding how each fee works, and when they are charged, is crucial to maximise your net gains and avoid unexpected costs. Here’s what every trader in South Africa should know about these fees.

1. Spread

The spread is the difference between the price you can buy a commodity for (ask price) and the price you can sell it for (bid price). This cost is inherent to all traded assets and represents profit for the broker. Spreads can be fixed or variable, often depending on market volatility and the commodity in question.

Example of Spread

You want to trade 10 ounces of gold. The buy (ask) price is $1,920 per ounce, and the sell (bid) price is $1,918 per ounce. The spread is $2 per ounce: - Your cost on 10 ounces is 10 × $2 = $20.

2. Transaction Commission

Some brokers charge a commission on every transaction. This can be a fixed amount per trade or a percentage of the trade volume. While some brokers offer “commission-free” accounts, the cost is often built into a wider spread.

Example of Transaction Commission

You buy R200,000 worth of crude oil. Your broker charges a commission of 0.09% per trade: - Commission = R200,000 × 0.09% = R180.

3. Financing Fee (Swap)

A financing fee, also called swap or rollover, is charged when you hold a leveraged position overnight. This reflects the cost (or, sometimes, the benefit) of borrowing money to finance your position, depending on the commodity and direction (buy/sell).

Example of Financing Fee (Swap)

You have a long position in copper CFDs worth R40,000. The overnight swap fee is −0.02%: - Swap fee = R40,000 × 0.02% = R8 per night.

4. Inactivity Fee

Many brokers apply inactivity fees if you do not make any trades over a set period, typically 3 or 6 months. This fee is automatically deducted from your account balance and can eat into your funds if you stop trading for a while.

Example of Inactivity Fee

You do not place any trades or log into your account for 6 months. Your broker charges an inactivity fee of R130: - After 6 months, R130 is deducted from your account.

5. Withdrawal Fee

Withdrawal fees are costs for taking money out of your trading account. These fees can be fixed (e.g., R50 per withdrawal) or variable (a percentage of the amount). It’s important to factor in these charges when planning to access your profits.

Example of Withdrawal Fee

You withdraw R8,000 from your trading account. The broker charges a fixed fee of R45 per withdrawal: - You receive R8,000 minus R45, so R7,955 is credited to your bank account.

Live commodity prices

What taxation applies to income derived from commodities in South Africa?

In South Africa (ZA), the taxation of income derived from commodities depends significantly on the type of investment instrument used—whether derivatives such as CFDs or futures, Exchange-Traded Funds (ETFs), shares in mining or oil companies, or the purchase of physical precious metals. Generally, these returns are treated as capital income, but distinct tax rules may apply to each product type, with differences in calculation, rate, and potential exemptions or reductions based on holding periods or nature of the gain. Understanding the local fiscal framework is essential for assessing the effective tax impact of your commodity investments.

For Contracts for Difference (CFDs) and futures, the tax regime in ZA is determined by the purpose of the investment. If positions are held as part of an ongoing trading activity or for short-term speculation, profits are treated as ordinary income and added to the investor’s taxable income, taxed at the personal marginal rate up to 45%. If, however, the instrument is acquired as part of a longer-term investment strategy, profits on disposals may qualify as capital gains, in which case the Capital Gains Tax (CGT) rules apply. CGT is calculated as 40% (for individuals) of the realised gain added to taxable income, subject to the individual’s marginal tax rate, with a R40,000 annual capital gains exclusion.

Investments in commodity ETFs listed on the Johannesburg Stock Exchange (JSE) are generally subject to CGT when units are sold. Any capital gain upon disposal is taxable in the investor’s hands. Additionally, if the ETF pays periodic dividends or distributions, those are typically subject to a 20% dividends tax, unless an exemption applies (e.g., certain retirement funds or foreign distributions with different treatment). ETFs do not attract interest withholding tax unless bond-related instruments are involved.

Holding shares in mining or oil companies results in two principal forms of taxable income: dividends and capital gains. Dividends paid out by South African-resident companies to ZA investors are generally subject to a 20% dividends tax, withheld at source. Upon sale of the shares, any gain is subject to CGT under the same rules as for ETFs and other listed instruments. If the shares are kept in tax-advantaged accounts (such as certain retirement vehicles), tax exemptions may apply, but this is subject to regulatory limits.

Physical precious metals such as gold and silver bullion, when held by individuals as a form of investment and subsequently sold, generate a capital gain or loss. Only realised gains at the time of disposal are taxable, falling under the CGT regime; there is no tax on unrealised appreciation or on simple holding. For physical assets, particular attention should be given to proof of ownership, valuation at acquisition and disposal, and possibly deductible costs such as secure storage or insurance.

In summary, the fiscal treatment of commodity-based investments in South Africa is mainly governed by either the income tax or capital gains tax regime, depending on the nature, duration, and structure of the holding. Exemptions and reductions based on investment vehicles or holding periods are limited, so investors should be careful to track both purchase and sale values, as well as any income received during the holding period.

Raw materials: understanding the effect of Contango and Backwardation

When you invest in commodities like gold, oil, or wheat, you rarely buy the actual physical goods. Instead, you invest via contracts: the spot price is what you’d pay for immediate delivery, while the futures price is what you agree to pay for delivery at a later date. The curve that connects these prices over different maturities—the term structure—tells you a lot about the market’s balance. Two key shapes of this curve, “contango” and “backwardation,” signal very different market conditions. For anyone investing in products that track commodity prices, understanding which regime dominates is crucial, because it can significantly impact your returns.

Contango: a future more expensive than the present

Contango describes a situation where futures prices are higher than spot prices. In other words, agreeing to buy a commodity in the future is more expensive than buying it right now.

Why does this happen? There are a few main reasons:

• Storage costs: For commodities such as oil or metals, storing the physical product until a future date costs money (warehouses, security, insurance).
• Financing costs: Keeping your money tied up in stored goods has a financial cost, since you can’t use it elsewhere.
• Supply surpluses: Contango is common when markets expect supply to be plentiful or when there is little pressure to get the commodity right away.

Example: Oil in times of surplus

Imagine the global oil market during a period of excess supply—say, when demand drops unexpectedly. Storage tanks fill up, and sellers have to pay to store unsold barrels. As a result, the futures price (which includes storage and financing costs) rises above the spot price. This is classic contango.

Backwardation: when urgency takes over

In backwardation, the opposite occurs: the futures price is lower than the spot price. Agreeing to buy a commodity later actually costs less than buying it now.

This normally signals:

• Shortages or perceived scarcity: If there's not enough of a commodity available right now to satisfy demand, current prices are pushed up.
• Urgent need: Sometimes buyers need goods immediately—say, due to a sudden crisis or supply chain issues.
• Discount for future delivery: The market, in effect, rewards those willing to wait, since the urgency is now.

Example: Wheat during the war in Ukraine

The war in Ukraine—a major wheat exporter—disrupted global supply. Suddenly, there was a rush to secure available wheat, driving up spot prices. Meanwhile, futures prices for delivery months later remained lower, as markets assumed the crisis would eventually stabilize. This is backwardation.

Why does this matter for investors?

Whether a commodity market is in contango or backwardation affects the performance of investment products built on futures contracts, such as ETFs, ETCs, and commodity funds. These products typically “roll” their positions as contracts approach expiry: they sell the soon-to-expire contract and buy a new one.

• In contango, this means buying new contracts at a higher price than the one just sold, resulting in a steady “roll loss.” Over time, this can erode returns, even if the spot price moves sideways.
• In backwardation, the opposite happens: rolling into a cheaper contract can generate a “roll yield,” supporting performance.

Summary

Paying attention to the shape of the commodity price curve is crucial for investors. Contango and backwardation send important signals about supply, demand, and market expectations. Understanding them enables more informed decisions, helps anticipate risks or opportunities, and allows investors to adapt their strategies to real market forces—especially when investing via products based on futures contracts.

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.