Best Commodities Brokers in 2025

Which raw materials can be traded online?

Commodities in Online Trading: Essentials for Canadian Investors

Commodities, or raw materials such as oil, gold, and wheat, are essential goods that power the global economy. On financial markets, commodities serve both as investment assets and as fundamental resources for industries and populations worldwide. Their prices are primarily shaped by supply and demand, weather, seasonal variations, and, very often, geopolitical events (such as conflicts or trade disputes). Unlike stocks or bonds, trading commodities often means speculating on future price movements rather than owning a company or receiving dividends.

Canadian investors can trade commodities online using a variety of financial instruments:

• CFDs (Contracts for Difference): Allow speculation on price movements without owning the asset.
• Futures: Standardized contracts to buy or sell a commodity at a future date and price, commonly used by professionals.
• ETFs (Exchange-Traded Funds): Funds that track the price of commodities or baskets of commodities, suitable for most retail investors.

These instruments are accessible through popular online brokers. Commodities trading requires awareness of market specifics and risk, but offers significant diversification compared to traditional asset classes.

Investing in Gold

Gold is one of the most popular commodities for Canadian investors. It is known for its role as a safe-haven during times of economic stress or high inflation. Gold’s price tends to move inversely to equities and currencies, making it valuable for diversification. ETFs offer exposure without storage concerns, while CFDs cater to more active traders.

Investing in Brent Oil

Brent oil is the global crude oil benchmark and a cornerstone of the energy market. Its price can be highly volatile, affected by economic trends, OPEC decisions, and global geopolitical tensions. While it offers high return opportunities, the risk level makes it suitable mainly for experienced or well-informed investors.

Investing in Natural Gas

Natural gas is a highly volatile energy commodity. Its price is extremely sensitive to seasonal demand changes, unexpected weather events, and storage data. Futures and CFDs enable traders to take advantage of short-term price swings, but they require close monitoring and risk management.

Investing in Aluminium

Aluminium is a key industrial metal, widely used in sectors like construction and transportation. Its price reflects global economic growth and technological trends. Investors can access aluminium via futures for direct exposure or ETFs if they seek sector-specific funds.

Investing in Grains (Wheat, Corn, Soybeans)

Grains like wheat, corn, and soybeans are essential agricultural commodities. Their prices react to crop yields, global food demand, weather, and trade policies. They are a way for investors to diversify and gain exposure to the global food sector, often via ETFs or futures. Agricultural commodity ETFs are recommended for those seeking simplicity and exposure to multiple grains.

How to invest in commodities?

Several different methods exist for investing in commodities, each with its own characteristics depending on your risk appetite, investment horizon, and objectives (such as seeking high short-term activity or a more stable long-term position). Commodities are physical assets like oil, gold, or wheat, but investors typically access them through financial instruments tailored for both direct and indirect exposure. Below, we explain and compare the main ways to invest in commodities.

Invest via CFDs (Contracts for Difference)

CFDs allow you to speculate on the price movements of commodities without owning the underlying asset. By trading CFDs, you can benefit from rising or falling markets using leverage, which means you only need to put down a fraction of the position’s full value. This leverage can magnify gains but also increase risks; losses can exceed your initial deposit. CFDs are mostly used for short-term trading and active speculation rather than long-term holding.

Example: CFD on Oil

Imagine oil is trading at $80 a barrel. You believe the price will rise, so you go “long” on one CFD contract (representing 100 barrels) with a margin requirement of 10%. If oil rises to $85, your profit is ($85 - $80) x 100 = $500, but your initial margin was only $800. If oil drops to $78, your loss is $200, which can exceed your margin.

Invest via Futures Contracts

Futures are standardized contracts traded on exchanges, obligating buyers and sellers to transact a set amount of a commodity at a predetermined price on a future date. Used both for hedging (protection against price changes) and speculation, futures provide high liquidity and transparency. However, they require a solid understanding of margin calls and contract expiry, and they may not suit every risk profile.

Example: Wheat Futures Contract

You commit to buy 5,000 bushels of wheat in September at $7 per bushel via a futures contract. If wheat’s price rises to $7.50 at expiry, you realize a profit of $0.50 x 5,000 = $2,500 (before fees). If the price drops to $6.50, your loss is $2,500.

Invest via ETFs (Exchange Traded Funds)

ETFs offer an accessible way for most investors to gain exposure to commodities or a diversified basket of them without having to manage the complexities of futures or physical storage. ETFs can track the spot price of a commodity, a basket of different commodities, or companies within the sector. They are bought and sold like stocks on major exchanges, providing liquidity, diversification, and often lower costs.

Example: Gold ETF

You buy 10 shares of a gold ETF at $20 per share (total $200). If the underlying gold price rises and the ETF reflects this, its price increases to $22 per share. Your holding is now worth $220.

Invest in Commodity-Related Stocks

Buying shares in companies whose business relies heavily on specific commodities offers indirect exposure. The value of these companies is often correlated with commodity prices, but also influenced by broader market and operational factors. With this method, investors can also benefit from dividend payouts and corporate growth, adding an equity risk component to commodity exposure.

Example: Buying Shares in Commodity Companies

Suppose you buy 100 shares of a Canadian mining company at $10 per share. If gold prices rise and boost the company’s profits, the share price might increase to $12, and your investment is now worth $1,200. The relationship isn’t always direct but often correlated.

Invest in Physical Commodities

The most traditional route involves purchasing the physical commodity itself, such as gold coins, silver bars, or even collectable grains and fine wines. This method offers ownership, security, and inflation hedging benefits, particularly with precious metals. However, considerations like storage, insurance, and liquidity make it less practical for most investors and limit accessibility to certain commodities.

Example: Buying Physical Gold

You purchase a 1-ounce gold coin at $2,500 from a reputable dealer. If gold prices rise to $2,700 per ounce, your coin potentially gains in value. You must safely store the coin and factor in potential dealer premiums and storage costs.

Each of these approaches offers distinct advantages, risks, and suitability depending on your preferred investment style and goals. Understanding the nuances of each method is the key to successful diversification into the commodity markets in Canada.

Which raw material matches your investor profile?

Investing in commodities can be a rewarding strategy, but not all commodities behave in the same way. Each has specific characteristics in terms of volatility, return potential, and exposure to geopolitical events. Choosing the right commodity should depend on your investment experience and your tolerance for risk. This guide will help you identify suitable commodities according to your investor profile.

🟢 Beginner: stable and predictable commodities

For newcomers, it’s essential to start with assets that offer stability and are less sensitive to sudden market shocks. Gold and aluminum stand out for beginners due to the following features:

• Low to moderate volatility: Gold is historically seen as a safe haven, and aluminum prices are relatively stable thanks to broad industrial use.
• Widespread usage: Both metals are widely used with well-understood market factors, reducing surprise events or sharp price swings.
• Strategies recommended:
• Invest via ETFs (Exchange Traded Funds) for cost-effective and diversified exposure.
• Use CFDs (Contracts for Difference) with low leverage if you prefer flexibility.
• Avoid day trading; prefer longer-term holding or regular investment plans.

🟡 Intermediate: dynamic assets influenced by current events

If you have some experience and a moderate risk appetite, you can consider commodities that are more responsive to economic and geopolitical news, such as oil and grains:

• Greater price movement: Oil and grains are influenced by global news (weather, regulations, OPEC decisions), creating trading opportunities.
• Requires market monitoring: To succeed, regularly follow news and key market reports related to energy or agriculture.
• Recommended strategies:
• Swing trading with CFDs or ETFs, aiming to benefit from price trends over days or weeks.
• Always set stop-loss orders to manage your risk.
• Analyze supply and demand reports to identify trends.

🔴 Expert: highly volatile and externally sensitive assets

For experienced and risk-tolerant investors, certain commodities offer significant potential but also high volatility, such as natural gas, short-term oil, and grains using short-term or leveraged strategies:

• Extreme volatility: Prices can swing sharply in response to weather, inventory data, or political shocks.
• High sensitivity to external data: Quick decisions and deep market analysis are required to manage these assets.
• Advanced strategies:
• Short-term trading (day trading or scalping) to capture quick price movements.
• Use advanced technical indicators for entry/exit timing.
• Apply hedging and strict leverage management to control exposure and limit losses.

Identifying the right commodities depends on understanding both the asset and your own investor profile. Adapting your strategy to your skill and comfort level will help you build a stronger, more resilient portfolio.

How to choose a broker to trade commodities?

Choosing the right broker is a crucial step for anyone looking to trade commodities successfully in Canada. The broker you select directly affects your trading costs, the security of your funds, the available assets, and the overall trading experience. Amid market volatility and regulatory complexities, a reliable broker ensures not only access to diverse commodity markets—energy, metals, agriculture—but also provides robust risk management tools and responsive customer support. Evaluating these aspects carefully allows you to trade with confidence, efficiency, and peace of mind.

Why invest in commodities?

Why include commodities in a diversified investment portfolio?

While stocks and bonds are the pillars of traditional investing, commodities often prompt questions around their true utility and volatility. Yet, looking beyond the headlines and short-term fluctuations, commodities deserve thoughtful consideration as part of an informed asset allocation strategy.

Commodities—such as energy products, agricultural goods, metals, and livestock—tend to exhibit price movements that are independent of, and sometimes even counter to, those of equities or fixed income. This low, or even negative, correlation means that including commodities in a portfolio may help smooth overall returns, especially during periods when traditional asset classes are underperforming. For Canadian investors in particular, exposure to commodities can help offset some country-specific risks, given the nation’s substantial economic ties to natural resources.

Another key argument is inflation protection. When the cost of living rises, prices of raw materials often move in the same direction. As suppliers pass on increased costs, commodities like agricultural produce, energy, or industrial metals see their values increase, potentially allowing investors to preserve their purchasing power. This relationship is not perfect and can be cyclical, but over the long run, commodities have demonstrated their usefulness as a hedge in inflationary episodes.

Within the commodities spectrum, precious metals—especially gold and, to a lesser extent, silver—play a unique role as so-called “safe haven” assets. During times of market turbulence or geopolitical uncertainty, investors often seek out assets perceived as less vulnerable to systemic risk. Historical data shows that precious metals can act as a buffer, helping to limit drawdowns when other portfolio components are under pressure.

Commodities are also a space for active, tactical investment opportunities. For example, oil prices can fluctuate rapidly in response to supply dynamics, technological transitions, or international tensions, offering the potential for informed investors to capture short- or medium-term gains. Similarly, agricultural prices may react to weather events or policy changes, presenting occasional windows for value creation. That being said, such tactical moves require sound market understanding and risk awareness.

Summary

Commodities are not a guarantee of constant performance, nor are they a cure-all against portfolio risk. However, as part of a broader, diversified investment strategy, they offer distinctive advantages: portfolio balance, potential inflation protection, safe-haven characteristics, and tactical opportunities. For thoughtful Canadian investors, commodities can play a measured but strategic role in building robust and resilient portfolios.

How much does commodity trading cost?

When trading commodities, understanding all the associated fees is crucial to maximizing your returns and avoiding surprises. Common fees include the spread (the difference between the buying and selling price), commissions on each transaction, overnight financing fees (often called “swap” or rollover fees), inactivity fees if you don’t trade for a certain period, and withdrawal fees applied when you transfer funds out of your trading account. Each of these costs can eat into your profits—or increase your losses—so it’s important to grasp how they’re charged and what impact they can have.

1. Spread

The spread is the difference between the price at which you can buy (ask) and sell (bid) a commodity. This is a hidden cost every trader pays, as you always buy slightly higher and sell slightly lower due to the spread. The size of the spread can vary depending on the commodity, market conditions, and your broker.

Example of spread

Suppose you want to trade crude oil. The buying price (ask) is CAD 75.15 per barrel, and the selling price (bid) is CAD 75.05. The spread is CAD 0.10. If you buy and then immediately sell one barrel, you'll lose CAD 0.10, representing the spread.

2. Trade commission

Many brokers charge a commission for each transaction—either a flat fee per contract or a percentage of the trade's value. Commissions can apply when you both enter and exit a trade.

Example of trade commission

If you buy one natural gas futures contract and your broker charges a commission of CAD 2.50 per contract per trade, you’ll pay CAD 2.50 when you open the position and CAD 2.50 when you close it—a total of CAD 5.00 in commissions for the round-trip.

3. Financing fee (swap)

When you hold certain commodities positions overnight, especially if they are leveraged (like CFDs or margin trades), you may incur a daily financing cost, called a “swap” fee. This fee compensates the broker for extending you leverage after market hours.

Example of financing fee (swap)

You open a leveraged position on gold with a broker who charges a swap of CAD 1.80 per day. If you keep the position open for 5 nights, you’ll pay a total of CAD 9.00 in financing fees (CAD 1.80 x 5).

4. Inactivity fee

Some brokers charge a monthly inactivity fee if you don’t use your account for a certain period (often 1 to 3 months). This fee encourages regular trading or account activity.

Example of inactivity fee

Imagine you don’t place a trade or log into your account for 3 consecutive months. Your broker charges an inactivity fee of CAD 15 per month, so after 3 months you will be charged CAD 45 in total.

5. Withdrawal fee

Withdrawing funds from your trading account may incur a fee, which can be a fixed amount per withdrawal or depend on the withdrawal method (e.g., wire transfer, PayPal).

Example of withdrawal fee

If your broker charges a withdrawal fee of CAD 10 per transaction, and you make two withdrawals this year, you will pay CAD 20 in total withdrawal fees.

By accounting for these various costs, you can better assess the real profitability of your commodity trades and choose trading habits suited to your goals and activity level.

Live commodity prices

What is the taxation on income from commodities in CA?

Taxation on commodity-derived income in CA depends on both the investment instrument selected (derivatives, funds, equities, or physical metals) and the country's local tax rules. Generally, these profits are classified as capital income, but each category is subject to a specific tax regime, and rules may differ depending on factors such as the investment vehicle, the nature of returns (capital gains, dividends, interest), and the holding period. Investors should be aware that certain commodities, such as precious metals, may have particular tax treatments or reporting obligations.

CFD and futures taxation in CA

CFD and futures contracts are considered derivative financial instruments. Gains realized from these operations in CA are typically treated as capital gains, subject to the general capital gains tax regime. Losses may be used to offset capital gains of the same nature, but certain speculative transactions might be requalified and taxed as ordinary income, depending on the taxpayer’s profile and activity level. It's essential to determine whether gains are considered from speculative or investment activity, as this can affect tax rates and loss carryforward options.

Commodity ETFs taxation in CA

Commodity ETFs are subject to taxation both on the distributions paid (if any) and on the capital gain upon sale. The tax rate and method may vary depending on whether the ETF holds the physical commodity or uses derivatives. Synthetic ETFs may face different fiscal treatment than physically-backed funds. In general, distributions are taxed as income, while capital gains on disposal benefit from favorable rates if the investment is held for more than the minimum period set by the CA tax authorities.

Shares of mining or oil companies taxation in CA

Shares of mining or oil companies are considered equity investments, and thus, both dividends and capital gains are taxable in CA. Dividends may be eligible for particular tax credits, reducing the overall tax burden. If shares are held in certain tax-advantaged accounts (such as registered investment savings accounts, if applicable under CA law), gains and dividends may be deferred or exempt, subject to contribution limits and account rules.

Physical precious metals taxation in CA

Physical precious metals (such as bullion gold and silver) are generally taxed in CA upon sale, with the profit realized treated as a capital gain. There are sometimes minimum holding periods or quantity thresholds for exemptions from capital gains tax, particularly for gains below a certain value. However, specific reporting requirements apply to physical possession and sale of precious metals, and the absence of certificates or official invoices may affect the ability to prove acquisition cost and claim certain exemptions. Investors should also be aware that some barter or exchange transactions involving metals could fall under special taxation rules stipulated by CA tax law.

Raw materials: understanding the Contango and Backwardation effect

Understanding Price Curves: Why Shape Matters

When investing in commodities like oil, wheat or metals, it's important to know that these products can be traded both for immediate delivery (the “spot” price) and for future delivery (the “futures” price). When we line up all the prices for delivery at different dates, we get what’s called the “forward price curve.” The shape of this curve—whether it’s upward- or downward-sloping—tells us a lot about the state of the market and can have a significant impact on investment decisions. The two main scenarios you’ll encounter are called contango and backwardation.

Contango: A Future More Expensive Than the Present

In a market situation known as contango, futures prices are higher than the current spot price. In other words, the further out you look on the calendar, the more expensive the contract becomes. This is especially common with commodities that can be stored, like oil or metals.

Why does contango happen? Typically, sellers need to be compensated for the costs of storing the physical commodity, insurance, and even financing while they wait to sell it later. As a result, they charge more for contracts with delivery dates further in the future.

Example: Oil during periods of surplus

Imagine oil producers in Canada facing a situation where output exceeds demand. Tanks start to fill up, and storing extra barrels becomes expensive. If the spot price of oil is $80 per barrel, but storing it for several months brings extra costs, then a futures contract for delivery in six months might trade at $85. This $5 “premium” reflects storage, insurance, and financing fees, creating a classic contango curve.

Backwardation: When Immediate Needs Drive Prices Higher

Backwardation is the opposite scenario, where futures prices are lower than the spot price. This means the market is willing to pay more for prompt delivery than for future supply. Backwardation often signals that there’s a shortage or urgent demand for a commodity, driving the spot price up.

This type of market environment can emerge with products that are harder to store or during periods of supply disruption. It often sends a message that buyers are willing to pay a premium to get the commodity now, rather than later.

Example: Wheat during the Ukraine war

In 2022, the war in Ukraine disrupted global wheat supply, leading to immediate shortages in Canada and many other countries. The spot price for wheat shot up to $400 per tonne, while futures contracts for delivery six months later traded at $370. This “discount” for future delivery reflected hopes that the crisis would ease, but also urgent demand to secure wheat right away—showcasing backwardation in action.

Why This Matters for Investors

If you invest in products tied to commodity futures—like certain ETFs, ETCs, or mutual funds—the shape of the forward curve can influence your investment returns, even if prices move as you predicted. That’s because most of these products don’t actually store physical barrels of oil or tons of wheat. Instead, they hold futures contracts, which must be “rolled over” as they approach expiry—selling the contract about to expire and buying one further out.

• In contango, this rollover usually means selling low and buying higher, which can eat into returns over time.
• In backwardation, the opposite occurs: selling high and buying lower can provide a performance tailwind.

That’s why understanding where the market stands—contango or backwardation—can be just as important as forecasting price trends themselves.

Summary

• Analyzing the price curve for a commodity helps investors spot warning signs (surplus, supply crunch), sense how the market expects conditions to evolve, and adjust their strategies.
• Whether your investment tracks the spot price or futures contracts, the curve’s shape impacts potential returns through the process of rolling contracts forward.
• Contango and backwardation aren’t just technical terms—they offer insight into market dynamics and help investors make more informed decisions.

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.