The commodities industry represents a corner of the market that will never go away. People need goods and supplies regardless of what the economy is doing. Oil is the most widely sought after commodity and because it is the most widely used fuel source in the world, oil creates a demand that will never be satiated. Other popular commodities, such as gold, are also highly traded.
In times of bad economies, oil prices will often drop, just like the current market situation. While oil prices drop because of consumer cut backs and government concerns, gold prices have had the opposite reaction. Gold marks a demand that will increase in value even if the economy worsens. Because of its rarity, gold has been a safe haven for investors throughout the centuries.
Oil and gold are not directly correlated in any way, but both are strong indicators of what the market necessitates. Gold growth will tend to go up more consistently as economies worsen because of an increased demand in safe investments. Oil goes up higher in value during good economies, but oil is more dependent on the direct laws of supply and demand. Because the U.S. only controls a small portion of the world’s oil supply, these factors are often beyond the control of the U.S. government. But while gold goes up on a consistent basis, oil has gone up and down in an oscillating manner. This makes opportunities for oil much more lucrative to short term traders while gold is more of a long term investment.