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All you Need to Know about MCX (Multi Commodity Exchange)

  • Posted Date: September 18, 2021

Indian market is largely influenced by Commodities as it runs industries, provides a living to farmers and laborers. It also helps in earning valuable foreign exchange when exported to the world market.

Commodities are any goods that are homogeneous and hence replaceable by any other goods of the same kind/grade. Just as share certificates can be traded in equity markets, commodities can be traded in commodity markets called MCX trading. Commodities are mostly bought and sold in what we call a futures transaction.

In this blog, we will give you all you need to know about MCX trading and MCX tips by giving you optimum share market advisory. Readout to know more…

What is MCX?

MCX is used for the Multi Commodity Exchange. MCX trading is the exchange for trading commodities; just like how BSE is for trading stocks of companies. You can trade gold, silver, and other metals along with agricultural commodities like cotton, coffee, cummin, etc. MCX trading is safe and secure.

What is Future Transaction?

Future is a contract to buy or sell a commodity or financial means on a designated future date at a price agreed upon at the initiation of the contract by the buyer and seller. With this time if the price of the commodity you have purchased goes up, you will get a profit. You can always check market conditions and listen to experts for MCX free tips.

Types of Commodities

  • Agri-based (Edible oils, Pulses, Grains, etc.)
  • Energy (Crude oil, Natural gas, etc.)
  • Base metals (Copper, Steel, Aluminium, Steel, etc.)
  • Precious metals (Gold, Silver, etc.)

Factors influencing the prices of Commodities

  • In the case of most agricultural commodities, it is demand and supply factors are crucial. Normally a stream in demand (like commodity demand from China) or a sudden shortage in supply can cause Agriculture based commodity prices to rise.
  • Currency fluctuations are another important factor that influences the price of commodities. Since most of the commodities are designated in US dollars, the value of the dollar index has an extreme influence on commodity prices. Gold and oil for example. You can rely on experts for MCX gold tips.
  • Inflation is one of the key factors that influence the price of commodities. Normally reasonable inflation is a sign of a robust economy and that leads to a pick-up in demand for commodities. This is true for most agricultural commodities and metals.
  • The US and global data flow matter a lot. The macro data flow in the form of the Fed rate action, the jobs data, the production data, the PMI data for manufacturing and services, the stance of the central banks of nations all make an impact on commodity prices.
  • Certain commodities are influenced by bulk demand and supply. For example, all industrial metal prices are impacted by Chinese demand which accounts for 50% of consumption. Similarly, OPEC actions and US inventory makes a difference to the price of crude oil.

Hopefully, the above information is helpful for you and if you want to know more or consult, we are a share market advisory company and ready to provide you all the necessary information you require to invest correctly in the market. We know that your money is really important to you and you want to grow it regularly. Invest carefully and smartly in the MCX market.

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