Commodities with leverage: glossary

The terms

• AluminiumAluminium is the light industrial metal whose production is mostly electricity, so its price is partly a power price. China makes over half the…
• Central bank gold buyingCentral bank gold buying is reserve managers adding gold, about a thousand tonnes a year from 2022 to 2024 per the World Gold Council. It is a buyer…
• COMEXCOMEX is the New York exchange, part of CME Group, where benchmark gold, silver and copper futures trade. Globex runs from about 3:30 AM Monday to…
• Commodity ETFA commodity ETF tracks a commodity either by holding the metal or by holding futures and rolling them. Futures-based oil funds bleed in contango…
• Commodity tradingCommodity trading is buying and selling the price of raw materials like gold, oil, gas and copper, almost always through contracts rather than the…
• Contango and backwardationContango is later futures months priced above nearer ones, the normal state when storage costs money; backwardation is the reverse, when the market…
• Contract rolloverContract rollover is closing an expiring futures month and opening the next to stay exposed. Front at $85.00, next at $84.50, and the reference…
• CopperCopper is the industrial metal priced three ways: LME in dollars per tonne, COMEX in cents per pound, Shanghai in yuan. China uses more than half…
• Crack spreadThe crack spread is the gap between the price of crude and the products refined from it, petrol and diesel. A refiner earns that gap, not the oil…
• Crude oil (WTI vs Brent)Crude oil trades as two benchmarks: WTI at the Cushing pipeline hub on NYMEX, and Brent at sea on ICE, which prices most of the world's oil…
• CushingCushing, Oklahoma is the pipeline and tank hub where WTI is delivered, so WTI depends on storage there. When Cushing filled in April 2020 the…
• EIA petroleum status reportThe EIA weekly petroleum status report counts US crude and fuel stocks, released Wednesday at 8:00 PM IST, 9:00 PM in winter. A bigger draw than…
• Gold ETFA gold ETF is a listed fund that holds bars in a vault and issues units that track the gold price. An issuer holds the gold, you hold a claim, and…
• Gold futuresGold futures are exchange-traded contracts on gold, the benchmark on COMEX in dollars per troy ounce, trading above London spot by the carry. Gold…
• Gold/silver ratioThe gold/silver ratio is how many ounces of silver buy one ounce of gold. It rises in fear, when gold is bid and industry is not, and falls in…
• Henry HubHenry Hub is the Louisiana pipeline junction where the US natural gas benchmark is priced, in dollars per million BTU, and traded as NYMEX gas…
• IEAThe IEA is the International Energy Agency, the Paris-based watchdog for oil-buying countries. Its monthly report forecasts world demand, and it…
• LBMA gold priceThe LBMA gold price is the London benchmark set by electronic auction twice a day, at 3:00 PM and 7:30 PM IST (4:00 PM and 8:30 PM in winter), which…
• LMEThe LME is the London Metal Exchange, started in a coffee house in 1877, where copper, aluminium, nickel and zinc are priced in dollars per tonne.…
• Lot size and tick sizeLot size is how much one contract covers, like 100 troy ounces for COMEX gold or 1,000 barrels for WTI; tick size is the smallest price step. One…
• MCX vs COMEXMCX is India's commodity exchange, pricing gold in rupees per 10 grams and shut at night and on weekends; COMEX is the New York exchange that sets…
• Mini and micro contractsMini and micro contracts are smaller versions of a standard futures contract: micro gold is 10 ounces against 100, micro WTI 100 barrels against…
• Natural gasNatural gas moves by pipe, so it has three regional prices, Henry Hub, TTF and JKM, linked only by LNG tankers. Storage fills April to October and…
• NYMEXNYMEX is the New York Mercantile Exchange, part of CME Group, home of WTI crude since 1983, Henry Hub gas and platinum. MCX crude settles on a NYMEX…
• Oil risk premiumThe oil risk premium is the part of the oil price that pays for the chance the next barrel does not arrive, not for any barrel that is missing. It…
• OPEC+OPEC+ is OPEC's members plus Russia and other producers, agreeing output quotas: the one cartel that moves a global price. Its monthly report and…
• PalladiumPalladium is the metal in petrol car exhausts: over 80% of demand is catalytic converters and Russia mines about two fifths. Its price is a bet on…
• PlatinumPlatinum is a precious metal whose price is a bet on factories and car exhausts: South Africa mines about 70% of it and catalytic converters are its…
• Silver futuresSilver futures are contracts on silver, mainly on COMEX in dollars per troy ounce. More than half of silver goes into industry, solar most of all…
• Spot price vs futures priceThe spot price is for delivery now; the futures price is for delivery later, and the gap is the cost of carry, which closes to zero at expiry. COMEX…
• Strait of HormuzThe Strait of Hormuz is the stretch of water between Iran and Oman that carried about a fifth of the world's seaborne oil and gas before the 2026…
• Strategic petroleum reserveA strategic petroleum reserve is oil a government stores for emergencies; the US holds the largest. A coordinated release adds supply the market did…
• Troy ounceA troy ounce is 31.1035 grams, the unit gold, silver, platinum and palladium are priced in, about 10% heavier than an ordinary ounce. MCX quotes…
• UraniumUranium is reactor fuel sold mostly on long-term contracts with no exchange spot market, so its price is a broker-published indicator moved by…