steelEnergy commodities include crude oil particularly West Texas Intermediate (WTI) crude oil and Brent crude oil, natural gas, heating oil, ethanol and purified terephthalic acid. Hedging is a common practice for these commodities.
Crude oil and natural gas
Precious metals currently traded on the commodity market include gold, platinum, palladium and silver which are sold by the troy ounce. One of the main exchanges for these precious metals is COMEX.
According to the World Gold Council, investments in gold are the primary driver of industry growth. Gold prices are highly volatile, driven by large flows of speculative money.[51]
Industrial metals
[60]
Markets in Financial Instruments Directive (MiFID) is the cornerstone of the European Commission's Financial Services Action Plan that regulate operations of the EU financial service markets. It was reviewed in 2012 by the European Parliament (EP) and the Economic and Financial Affairs Council (ECOFIN).[61] The European Parliament adopted a revised version of Mifid II on 26 October 2012 which include "provisions for position limits on commodity derivatives", aimed at "preventing market abuse" and supporting "orderly pricing and settlement conditions".[62]
The European Securities and Markets Authority (Esma), based in Paris and formed in 2011, is an "EU-wide financial markets watchdog". Esma sets position limits on commodity derivatives as described in Mifid II.The European Securities and Markets Authority (Esma), based in Paris and formed in 2011, is an "EU-wide financial markets watchdog". Esma sets position limits on commodity derivatives as described in Mifid II.[62]
The EP voted in favor of stronger regulation of commodity derivative markets in September 2012 to "end abusive speculation in commodity markets" that were "driving global food prices increases and price volatility". In July 2012, "food prices globally soared by 10 percent" (World Bank 2012). Senior British MEP Arlene McCarthy called for "putting a brake on excessive food speculation and speculating giants profiting from hunger" ending immoral practices that "only serve the interests of profiteers".[63] In March 2012, EP Member Markus Ferber suggested amendments to the European Commission's proposals, intended to strengthen restrictions on high-frequency trading and commodity price manipulation.[64]