Definition
A commodity is a basic good that is used in everyday life and can be traded in the market. These are usually natural resources or raw materials like gold, silver, oil, wheat, or cotton.
Example
Gold is a commodity that people buy for investment, while wheat is a commodity used for food. These goods are traded in commodity markets, and their prices change based on demand and supply.
Caution
Commodity prices can be very volatile due to factors like weather, global demand, and economic conditions. Investors should understand these risks before investing in commodities.