Retail investors can actively participate in commodity investments.

MAHÉ, Seychelles, April 13, 2026 /PRNewswire/ — Investing in commodities without physical ownership is a well-established way to generate returns, even in a bear commodity market. There are several instruments available for such investments. Broadly speaking, these include exchange-traded funds (ETFs) or exchange-traded products (ETPs), shares in commodity companies, commodity mutual funds, and — for more active traders — commodity CFDs. How do they differ, and which is best suited to an ordinary retail investor? Read on through the Gulf Brokers guide to becoming a more informed investor.

First, Gulf Brokers must emphasise that investing in commodity securities carries significant risk — particularly in turbulent times such as those we are experiencing today. Commodity securities are highly cyclical (sensitive to the economic cycle) and sentiment-driven (strongly influenced by the prevailing mood in the market).

Commodity mutual funds

Commodity mutual funds are investment vehicles that pool money from investors to gain exposure to the price movements of raw materials — such as gold, oil, or agricultural products — without directly purchasing or storing physical assets. These funds provide diversification and act as a hedge against inflation, typically investing in commodity-linked derivatives, shares in mining and energy companies, or physical bullion.

There are single commodity funds, multi-commodity funds and commodity equity funds. Single commodity mutual fund schemes focus on a single commodity (i.e., gold, oil, natural gas). Multi-commodity funds invest in a diversified mix of commodities, such as agricultural products, metals, and energy resources, etc. Commodity equity funds invest in stocks of companies that are involved in the production or trading of commodities. The performance of these funds is closely tied to the financial health of the companies they invest in.

Exchange Traded Commodity funds (ETCs or Commodity ETFs)

Exchange Traded Commodity funds (ETCs or Commodity ETFs) are financial instruments that track the performance of commodities like gold, oil, or agricultural products. Traded on stock exchanges like stocks, they provide easy access to commodity markets without requiring direct ownership or futures trading. They can be physically backed or use futures contracts.

Other commodity ETFs track the performance of a broad commodity index which includes many individual commodities representing a combination of physical storage and derivatives positions.

You would commonly invest into commodity ETFs when you are trying to hedge against inflation or to see profits when a stock market is sputtering. However, just like with any investment, commodity ETFs carry risk and are by no means a guarantee of profit.

Commodity stocks

Commodity stocks are shares of companies involved in producing, mining, or transporting raw materials such as oil, gas, metals, or agricultural products. Well-known names include Shell, BP, and ExxonMobil. However, in addition to these established commodity giants, smaller commodity companies’ shares may also stand to benefit from the current situation in commodity markets.

Investing directly in commodity companies’ shares can be attractive for those with sufficient knowledge, experience, and time to monitor stock market developments on a daily basis.

Investing this way also requires you to manage your own risk diversification — something that is usually handled for you when investing through a fund. Bear in mind that commodity stocks are highly sensitive to economic cycles and are therefore among the riskiest equities overall.

Commodity CFDs

A Contract for Difference (CFD) is a derivative instrument that allows you to speculate on the price movement of a commodity — such as crude oil, gold, or natural gas — without ever owning the underlying asset. When you open a CFD position, you agree to exchange the difference in the commodity’s price between the time the position is opened and the time it is closed. If the price moves in your favour, you profit; if it moves against you, you incur a loss.

One of the key advantages of commodity CFDs is flexibility: you can take a long position (betting on rising prices) or a short position (betting on falling prices) with equal ease. This makes CFDs particularly useful in volatile markets where prices can move sharply in either direction — as is very much the case in today’s oil market environment.

CFDs use leverage, meaning you only need to deposit a fraction of the total trade value (known as the margin) to open a position. This amplifies both potential gains and potential losses, making CFD trading a higher-risk activity. Unlike futures, CFDs have no fixed expiry date, giving traders greater flexibility in managing their positions. And unlike options, there is no premium to pay upfront — but there is also no cap on the downside, so disciplined risk management is essential.

For retail traders, commodity CFDs — especially on crude oil — have become one of the most actively traded instruments globally. They offer tight spreads, high liquidity, and round-the-clock access to energy markets. Gulf Brokers offers CFD trading on Brent crude, WTI crude, natural gas, gold, silver, and a range of other commodities, enabling clients to respond swiftly to fast-moving market developments.

As with all leveraged products, commodity CFDs carry a high level of risk and may not be suitable for all investors. Losses can exceed your initial deposit. It is important to understand how CFDs work and to use risk-management tools such as stop-loss orders before trading. Gulf Brokers provides a free demo account loaded with $100,000 in virtual funds, allowing new traders to practise and build confidence before committing real capital.

Times of unprecedented gains and losses

The global oil market is currently experiencing its most severe supply disruption in history. Following the outbreak of the US–Iran war in late February 2026 and the near-closure of the Strait of Hormuz — through which roughly 20% of the world’s oil normally flows — Brent crude surged more than 60% over the course of March alone, its largest monthly gain on record, trading above $108 a barrel as of early April 2026. The International Energy Agency has described the crisis as the worst energy shock ever recorded, with global supply losses estimated at over 10 million barrels per day.

In this environment, every instrument described in this guide takes on new significance. Conservative investors may prefer the managed exposure of a commodity mutual fund or ETF. Those who follow the markets closely might consider commodity stocks of non-Middle-Eastern producers benefiting from elevated prices. And active traders with experience in leveraged products may find commodity CFDs — particularly on crude oil — the most direct and flexible way to position themselves in what is shaping up to be the defining commodity event of this decade. Whatever instrument you choose, risk management has never been more important.

This marketing material is provided for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any financial instruments.

Trading in securities involves significant risk and may not be suitable for all investors. Prices of securities may fluctuate significantly and may result in a total loss of your investment. Investors should be aware that losses may exceed potential profits when buying and selling securities. In certain market conditions, you may sustain losses that exceed your initial investment. Securities and contracts for differences are complex financial instruments that require a high level of knowledge and understanding. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.

About Gulf Brokers

Gulf Brokers Ltd. is a licensed and award-winning broker, regulated by the FSA, licence SD013. Founded in 2016, the company offers access to over 800 trading instruments — including forex pairs, commodity CFDs, indices, metals, and shares — through the powerful MetaTrader 5 (MT5) platform, available on desktop, web, and mobile. Gulf Brokers provides 24/5 dedicated trading support, a free $100,000 demo account, and competitive spreads with leverage of up to 1:500. The broker has been recognised as the Best FX Broker in Asia at the Forex Expo.

For more information, visit www.gulfbrokers.com

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