If you want to diversify your investment portfolio or hedge against inflation, you might be considering investing in commodities. From gold and crude oil to wheat and coffee, there are several different ways you can gain exposure to these raw materials.
In this guide, we’ll explore how to trade commodities in Canada, the pros and cons of trading commodities, and the best platforms to check out when you’re ready to invest.
What are commodities?
Commodities are tradable raw materials. These basic goods can be sorted into four broad categories: metal, energy, livestock and agriculture.
The commodity market predates the stock market, as people have exchanged commodities like gold, food and livestock for centuries. Today, the modern commodities market operates as publicly traded exchanges that facilitate the movement of contracts for physical goods.
Investors can gain exposure to commodities through commodity futures and CFDs, by investing in exchange-traded funds (ETFs) and mutual funds, or by purchasing stocks from companies that produce commodities. It’s also possible to purchase commodities as physical goods, but doing so requires you to store the goods yourself.
Popular commodities
While far from exhaustive, this list includes some of the more popular commodities.
Questrade offers a comprehensive range of investing tools and resources for new as well as more experienced investors. It provides commission-free trading of stocks and ETFs, and support for fractional shares means you can get started with a small amount to invest. And with trading platforms to suit beginners and advanced investors, there's a lot to like about Questrade for a wide range of people.
Pros
Commission-free stock and ETF trading
User-friendly trading platform
Wide range of research tools
Highly-rated mobile apps
Cons
No futures trading
Fees for trading international equities
Signup Offer
Get free contracts, no commissions and a 30 day free trial of Questrade Plus. Use the offer code FREEOPTIONS.
If you want to trade commodity futures, Interactive Brokers is one of a small number of Canadian platforms where you can trade futures contracts. But there are plenty of other investment options too, with Interactive Brokers providing the ability to trade stocks, ETFs and much more on 160 global markets. A choice of trading platforms suited to different skill levels and a great selection of on-demand educational resources also help make the platform a top choice.
Pros
Access a huge range of assets and global markets
Supports commodity futures trading
Plenty of advanced trading tools
Competitive pricing
Cons
Some advanced features won't suit beginners
Only one free withdrawal per month
Monthly fee for real-time market data
Monthly Account Fee
$0
Account Types
RRSP, TFSA, Personal, Joint
Available Asset Types
Stocks, Bonds, Options, Index Funds, ETFs, Forex, Currencies, Futures
Get 100 free online stock and ETF trades when you open a new account & get up to $15,000 in cashback when you transfer funds from outside CIBC to your new or existing account. Valid until March 31, 2026. T&Cs apply.
This Big Bank self-directed investing platform is a solid option if you want to start trading commodities in Canada. When you create a CIBC Investor's Edge account, you can trade stocks, ETFs, mutual funds, precious metals and more, and you can choose from a cash account, a margin account or a range of registered accounts. And if you're new to investing, Investor's Edge's generous selection of research tools and educational resources will help you boost your trading knowledge.
Pros
Trade an extensive variety of assets
Supports cash and margin trading
Wide range of research tools available
User-friendly platform
Cons
You'll find cheaper brokerage fees elsewhere
$100 annual fee if you don't meet minimum asset requirements
Funding your account is a hassle if you don't bank with CIBC
Discount brokerage Moomoo offers a user-friendly trading experience for new and more experienced investors. It provides access to US and Canadian stocks and ETFs as well as US options, with competitive fees no matter what you trade. Experienced traders will appreciate the platform's advanced charting and research tools, while free educational resources and market news will help you make informed investing decisions.
Pros
Free Level 2 market data
Demo account so you can practice trading
Highly-rated mobile app
Access analyst ratings and charting tools
Cons
No maximum trade fees
Other platforms provide access to a wider range of international markets
No joint accounts
Signup Offer
Get up to $4,600 in trading perks.
Monthly Account Fee
$0
Account Types
RRSP, TFSA, Personal, FHSA
Available Asset Types
Stocks, Options, ETFs
ETF Transaction Cost
USD$0.99/stock
Option Fee
US stocks and ETFs: USD$0.99/stock (min. US$1.99 per trade)
Get 5% cash back on every dollar you invest up to $15,000 and 1% cash back on any amount above that. Plus, new clients receive unlimited free trades. Use code QTRADE2025. Valid until January 5, 2026. T&Cs apply.
Qtrade is an online brokerage platform where you can trade stocks, ETFs, bonds, options, GICs and more. It's easy for new users to create stock watchlists, access analyst recommendations from Morningstar, and set investing goals. For more advanced traders, customized charting and technical analysis tools along with the handy Portfolio Simulator can help you develop and refine your investing strategy.
Pros
$0 commissions on equities, mutual funds, ETFs and options
Trade a wide range of assets
Access a library of educational resources
Wide selection of account types
Cons
No futures trading
Signup Offer
Get 5% cash back on every dollar you invest up to $15,000 (up to $750 cash back) and 1% cash back on any amount above that (up to max. cash back of $2,000). Plus, new clients receive unlimited free trades. Use code QTRADE2025. Valid until January 5, 2026.
RBC Direct Investing offers a long list of benefits if you want to start trading commodities in Canada. This feature-packed platform lets you trade a wide variety of assets, including commission-free mutual funds and selected ETFs, and it's easy to open an account online and start trading. You can trade online, via mobile or using a fully customizable dashboard, and analyst picks and stock screeners help make it easier to choose your next investment.
$9.95 ($6.95 if you place 150+ trades per quarter)
Option Fee
$6.95 to $9.95 (+$1.25 per contract)
Stock Trading Fee
$9.95
FX Fee
0.10% - 1.60%
Min. Deposit
$0
Scotia iTRADE
Scotia iTRADE
7.9
Great
Get up to 20 free stock and ETF trades by opening a Scotia iTRADE and a select Scotiabank account. T&Cs apply.
Scotia iTRADE makes it quick and easy to start trading on your desktop or mobile. It offers a choice of account types, access to a wide range of tradeable assets, and zero commissions on a selection of ETFs. iTRADE offers plenty of educational resources too, plus a handy Analyst Research Centre to help you choose investments that suit your goals.
Pros
Wide range of research tools
Trade a huge variety of assets
Discounts for active, young and high-balance traders
Cons
More expensive than discount brokers
Annual fee if conditions aren't met
Some mixed reviews for Android app
Signup Offer
Get up to 20 free stock and ETF trades by opening a Scotia iTRADE and a select Scotiabank account. T&Cs apply.
$9.99 ($4.99 if completed 150 trades or more a quarter)
Option Fee
$9.99 + $1.25 contract ($4.99 + $1.25 contract if completed 150 trades or more a quarter)
Inactivity Fee
$25/year
Stock Trading Fee
$4.99–$9.99
Account Fee
$100
FX Fee
Varies
Min. Deposit
$0
Why should I invest in commodities?
There are a few key reasons why you should consider adding commodity investments to your portfolio:
Profit potential. The volatility of commodity prices means there is the potential to make a tidy profit from your investment. There can be high levels of demand for these crucial raw materials—for example, the growth and industrialization of emerging economies can lead to increased demand for metals and mineral resources.
Diversify your portfolio. Commodities also provide an effective way to diversify your investments, particularly if your portfolio is heavily exposed to financial stocks. Commodities tend to have a low correlation with stocks, so they can reduce your risk during a market downturn.
Hedge against inflation. Commodity prices tend to increase in line with growing inflation, so investing in commodities can be a useful hedge against inflation.
Multiple ways to invest. There are several ways you can gain exposure to commodities, so you don’t necessarily need to buy and store a physical commodity to add it to your portfolio.
Are commodities volatile?
Due to supply and demand, commodities can be more volatile than stocks, and some commodities are more volatile than others. The overall volatility of the commodities market is often reflective of global events, but can also be impacted by environmental concerns, geopolitics and more.
For example, oil tends to be more volatile than most. As one of the most liquidly traded commodities, it’s vulnerable to a variety of market-impacting events, including trade discrepancies, taxation and more. When Russia invaded Ukraine in February 2022, crude oil prices rapidly increased to more than US$100 a barrel. The oil industry is no stranger to market disruption and investors interested in this commodity will need to assess their risk tolerance before getting involved.
On the other hand, gold is typically one of the more stable commodities on the market. Gold has both historical and cultural value that predates modern currency. In fact, gold is often viewed as a safe haven for investors when the stock market is down.
How to trade commodities in Canada
There are five different ways that you can invest in commodities:
Stocks
ETFs and mutual funds
Futures
CFDs
Purchasing the commodity
Stocks
Buying stocks is one of the simplest ways to invest in commodities. This method involves purchasing shares of companies that manufacture or sell physical goods.
You’ll need a brokerage account to invest, and it’s easy to open an account online—it’s worth shopping around for a brokerage signup bonus too. Once you’ve applied, all you need to do is fund your account to begin investing.
Before purchasing stocks, research the commodity you’re interested in and find out which companies contribute to the industry. Stock screeners are beginner-friendly research tools that can help you find a company that fits your criteria.
Once you pick a company, you enter the number of shares you’d like to purchase and execute the order. After that, you can monitor your investment by logging into your brokerage account. Check out our guide to the best stock trading apps in Canada if you’re ready to start investing.
Commodity ETFs allow you to invest in a collection of companies. Like stocks, they’re a beginner-friendly asset that can be bought and sold through a brokerage account. But unlike stocks, they offer a more diverse investment opportunity, spreading your investment across multiple companies to dilute the risk of volatility.
ETFs are a practical way to gain exposure to a variety of companies in the industry you’re interested in. Funds typically have a theme and contain a basket of stocks that conform to that theme. There are oil ETFs, gold ETFs, agriculture ETFs—an ETF for any segment of the market you can think of. There’s no shortage of choices available and you can buy and sell ETFs through your brokerage account in the same way you do stocks. Popular commodity ETFs include the CI Auspice Broad Commodity ETF, the Horizons Crude Oil ETF and the iShares Global Agriculture Index ETF.
Alternatively, you could invest in a commodity mutual fund. The basic premise is the same—mutual funds feature a collection of stocks—but they tend to have higher minimum investments and they’re traded at the end of each trading day instead of during market hours.
Futures contracts are one of the most complex assets on the market and are typically only traded by professional investors. New investors will want to steer clear of this security until they have a solid understanding of the market and how futures contracts work.
A futures contract is an agreement to buy or sell an asset at a set price on a certain date. Contracts can be bought and sold repeatedly until the expiration date and the contract’s value will fluctuate based on market conditions. Futures are traded on regulated exchanges like the Chicago Mercantile Exchange (CME), the New York Mercantile Exchange (NYMEX) and the National Stock Exchange of India (NSE).
A futures contract is a gamble—and a risky one. If you hold a futures contract, you are obligated to fulfill the terms of that contract on its expiration date, no matter how the commodity’s price has shifted since you purchased the contract.
Futures contracts should only be pursued by experienced traders. Learn more in our guide to futures trading in Canada.
Contracts for difference (CFDs)
CFDs are another type of derivative trading that can provide exposure to commodities. With a commodity CFD, you can speculate on the price movement of an underlying commodity. Rather than ever actually owning the asset, you predict whether you think its price will rise or fall.
However, CFDs are complicated and confusing, and they also offer the ability to trade with leverage. It’s possible to lose much more than your initial investment, so CFD trading is definitely not suitable for beginners.
Finally, you can invest in a commodity by actually purchasing physical goods—gold, wheat, livestock, you name it. This approach takes hands-on investing to a whole new level and is the most challenging and time-intensive method on this list.
You’ll need to locate a dealer that sells the commodity you’re interested in, purchase it and arrange for pickup or delivery. You’ll be responsible for the storage of what you purchase—a complex undertaking if you’re investing in something that’s bulky or difficult to transport. And should you plan to sell your commodity in the future, it’s up to you to identify a buyer and facilitate the transaction.
The bottom line? This method is not for first-time investors and should only be attempted by those with experience trading a specific type of commodity.
Risks of trading commodities in Canada
There are also a few drawbacks to watch out for if you’re thinking about trading commodities in Canada:
Risk. If you’re looking for a safe investment with minimal risk, you might want to consider other options.
High volatility. Commodity prices are influenced by a wide range of factors and can be highly volatile, so there’s a chance that the price of a commodity could quickly move against you.
Risks of some trading methods. Futures contracts and CFDs are highly complicated and risky, so they’re not suitable unless you’re an experienced trader. The easiest approach for beginners is generally to stick to ETFs or individual stocks.
Won’t provide an income. In the words of Warren Buffett, “The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you.” So rather than buying commodities themselves, you might want to look for stocks, ETFs and mutual funds that pay regular dividends.
Environmental concerns. Investing in certain commodities and companies may raise concerns for investors who take a strong ESG (Environmental, Social and Governance) focus to managing their portfolio.
Bottom line
Commodities may help diversify your investments, but they are prone to volatility. Conduct some research before investing to make sure the commodity you purchase aligns with your portfolio and investment strategy.
Frequently asked questions about investing in commodities
Yes, commodities are typically considered to be risky investments. Their prices can be volatile and are influenced by a wide range of factors, including everything from weather to geopolitical tensions, so price movements can be unpredictable.
Commodities can be split into two different categories: hard commodities and soft commodities. Hard commodities are natural resources such as metals, oil and coal, while soft commodities are agricultural products like wheat, coffee and livestock.
You don't necessarily need to buy, transport and store a physical commodity to gain exposure to these types of assets. Beginner investors might like to consider investing in a commodity-themed ETF or mutual fund, or investing in the stocks of individual companies. Experienced traders also have the option of more complicated investments, such as futures contracts and CFDs.
You'll need to create an account with an online broker to invest in commodities. Compare online trading platforms to find a broker that offers access to the assets and markets you want to trade and charges the lowest fees. You can sign up for an account by providing your personal information, contact details and proof of ID. It's then a matter of depositing funds into your account before placing your first trade.
Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
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Shannon Terrell is a lead writer and spokesperson at NerdWallet and a former editor at Finder, specializing in personal finance. Her writing and analysis on investing and banking has been featured in Bloomberg, Global News, Yahoo Finance, GoBankingRates and Black Enterprise. She holds a bachelor’s degree in communications and English literature from the University of Toronto Mississauga.
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