Commodities trading in the UK is highly accessible. All that’s needed is an account with a regulated broker. The most popular commodity markets to trade include gold, silver, corn, wheat, oil, and natural gas.
Choosing the best commodity trading platforms is crucial for ensuring trades are placed in a safe environment and at competitive fees. This guide ranks and reviews the best commodities brokers in the UK. We also explain how commodity trading works and what best practices to follow.
The Top Commodities Brokers in the UK Ranked
The best commodities brokers for UK traders are summarized below:
- eToro – The Overall Best Commodity Broker for 2024
- XTB – Regulated UK Broker With No Account Minimums
- AvaTrade – Trade 19 Commodity Markets at 0% Commission
- FP Markets – One of the Best Options for Trading Gold Online
- Pepperstone – Spread Bet Commodities to Avoid Capital Gains Tax
- IG – Invest in Professionally Managed Commodity Portfolios
- Plus500 – Trade Commodities and Other Assets on an Android/iOS App
- Trading 212 – User-Friendly Commodity Trading Platform With a £10 Minimum
- Saxo – Access Commodities via CFDs, Futures, Options, and ETCs
- CMC Markets – Lists Over 100 Commodity Markets With Ultra-Fast Execution
Commodities Trading Platforms Compared
The table below compares trading fees and other key metrics of the top commodities brokerages in the UK market:
Broker | Commodity Markets | Fees | Commodity Instruments | Min Deposit | Demo Account? | Mobile App? | Max Leverage |
FCA Regulated?
|
eToro | 34 | Spread-only trading on commodities. Variable spreads start from 5 pips (oil) and 0.025% (gold) | CFDs, ETF investing | $100 (about £77) | Yes | Yes | 1:20 | Yes |
XTB | 27 | Spread-only trading on commodities. Target spreads of 0.3 points (oil) and 0.035 points (gold) | CFDs, ETF investing | £0 | Yes | Yes | 1:20 | Yes |
AvaTrade | 19 | Spread-only trading on commodities. Target spreads of $0.03 over market (oil) and $0.27 over market (gold) | CFDs, spread betting | £100 | Yes | Yes | 1:20 | No |
FP Markets | 36 | Spread-only trading on standard accounts. Average spreads of 0.02 points (WTI oil) and 0.19 points (gold) | CFDs | £100 | Yes | Yes | 1:20 | No |
Pepperstone | 40 | Spread-only trading on spread betting accounts. Average spreads of 2.4 points (Brent oil) and 0.16 points (gold) | CFDs, spread betting | £0 | Yes | Yes | 1:20 | Yes |
IG | 35 | Spread-only trading on commodities. Average spreads of 2.8 points (Brent oil) and 0.3 points (gold) | CFDs, spread betting, ETF investing, DMA | £50 (bank transfer), £250 (debit/credit cards) | Yes | Yes | 1:20 | Yes |
Plus500 | 27 | Spread-only trading on Spread-only trading on commodities. Average spreads of 0.4 points (oil) and 0.38 points (gold) | CFDs | £100 | Yes | Yes | 1:20 | Yes |
Trading 212 | 24 | Spread-only trading on commodities Average spreads of 0.03 points (oil) and 0.58 points (gold) | CFDs, ETF investing | £10 | Yes | Yes | 1:20 | Yes |
Saxo | 20 | Commissions and/or spreads vary depending on the product and account tier | CFDs, Futures, Options, ETCs | £0 | Yes | Yes | 1:20 | Yes |
CMC Markets | 100+ | Spread-only trading on commodities. Minimum spreads of 2.5 points (Brent oil) and 0.23 points (gold) | CFDs, spread betting | £0 | Yes | Yes | 1:20 | Yes |
Reviewing the Best Commodities Brokers in the UK
We’ll now review the top UK commodities brokers, allowing traders to make an informed decision. Read on to choose the best option for you.
1. eToro – The Overall Best Commodity Broker for 2024
- No of Commodity Markets: 34
- Fees: Spread-only trading on commodities. Variable spreads start from 5 pips (oil) and 0.025% (gold)
- Min Deposit: $100 (about £77)
eToro, an FCA-regulated broker with over 35 million clients, is the overall best commodity trading option. It offers 34 popular commodity markets, including precious metals like gold, silver, and platinum. Oil, natural gas, and agricultural products like wheat and sugar are also available. Commodity markets are backed by CFDs, so UK traders can apply leverage of up to 1:20.
All commodities on eToro can be traded on a spread-only basis. Spreads start from 5 pips and 0.025% for oil and gold, respectively. Another option on eToro is to invest in commodity ETFs. These are aimed at longer-term investors. For example, the SPDR Gold ETF is backed by physical gold, so closely mirrors the spot price. eToro also offers commodity-focused smart portfolios.
These are built and managed by eToro, so the investment experience is passive. eToro also offers other asset classes, including forex, cryptocurrencies, indices, and shares. GBP deposits and withdrawals are fee-free. However, most commodities trade in USD, so conversion charges will apply. What’s more, the minimum deposit is $100 (about £77).
Pros
Cons
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more
2. XTB – Regulated UK Commodity Broker With No Account Minimums
- No of Commodity Markets: 27
- Fees: Spread-only trading on commodities. Target spreads of 0.3 points (oil) and 0.035 points (gold)
- Min Deposit: £0
XTB is one of the most popular commodity trading platforms that supports 27 commodity markets. This includes everything from oil and nickel to natural gas, platinum, and soybean. Not to mention gold, silver, and copper. XTB is a commission-free commodity broker so only the spread needs to be covered. It offers a target spread of 0.3 points on oil and 0.035 points on gold.
These spreads are competitive but will increase during volatile trading conditions. XTB offers commodity CFDs, so long and short trading is available. Like most UK platforms, gold can be traded with leverage of 1:20. Other commodities come with lower leverage limits of 1:10. XTB supports over 5,800 other financial markets, including indices, shares, and forex.
Another benefit of XTB is there are no account minimums. UK traders can deposit any amount via debit/credit card and bank transfer. What’s more, XTB offers a free demo account. This enables traders to speculate on the commodity markets risk-free. XTB is available on browsers and a native app, meaning commodities can be traded anywhere at any time.
Pros
Cons
76% of retail investor accounts lose money when trading CFDs with this provider.
3. AvaTrade – Trade 19 Commodity Markets at 0% Commission
- No of Commodity Markets: 19
- Fees: Spread-only trading on commodities. Target spreads of $0.03 over market (oil) and $0.27 over market (gold)
- Min Deposit: £100
AvaTrade is another regulated trading platform that’s popular with commodity traders. It lists 19 commodity markets, including gold, wheat, silver, platinum, and soybean. No commissions are charged, the spreads are low, and generally, this broker offers competitive pricing across all asset classes. Crude oil can be traded at just $0.03 over market, and gold at $0.27 over market. Leverage and long/short trading is available via CFDs.
AvaTrade also offers commodity trading via spread betting. Other asset classes include shares, indices, forex, and bonds. The minimum AvaTrade deposit for UK traders is £100. No deposit fees are charged. AvaTrade offers a free demo commodities trading platform with risk-free funds. This is worth using before trading commodities with real money.
AvaTrade supports multiple trading platforms, including MT4 and MT5. These are ideal for setting up commodity trading bots. They also have advanted trading tools that come packed with economic and technical indicators. Alternatively, AvaTrade’s native platform is more suited for newbies. It’s available on desktop browsers and an Android/iOS app.
Pros
Cons
76% of retail investor accounts lose money when trading CFDs with this provider.
4. FP Markets – One of the Best Options for Trading Gold Online
- No of Commodity Markets: 36
- Fees: Spread-only trading on standard accounts. Average spreads of 0.02 points (WTI oil) and 0.19 points (gold)
- Min Deposit: £100
UK commodity traders might also consider FP Markets, especially those looking to trade gold. It offers multiple gold trading markets against various currencies, including GBP. This means you can trade gold without currency conversion costs. Other gold pairs include USD, EUR, and AUD.
FP Markets also offers other popular metals, such as palladium, platinum, silver, zinc, nickel, and aluminum. It also supports Brent and WTI crude oil. Those opening a standard account must meet a £100 minimum deposit. This account type offers 0% commission trading. Spreads on gold average just 0.19 points when traded against USD.
However, this increases to 0.39 points for the GBP/gold market. FP Markets also offers a free demo account, which connects to MT4. This comes with $100,000 in paper funds and it mirrors real-time commodity prices. Other asset classes on FP Markets include shares, ETFs, bonds, forex, and indices. While the best cryptocurrencies are also supported, these aren’t available to UK traders.
Pros
Cons
Derivative products are highly leveraged, carry a high level of risk and may not be appropriate for all investors
5. Pepperstone – Spread Bet Commodities to Avoid Capital Gains Tax
- No of Commodity Markets: 40
- Fees: Spread-only trading on spread betting accounts. Average spreads of 2.4 points (Brent oil) and 0.16 points (gold)
- Min Deposit: £0
Pepperstone is one of the best commodities brokers in the UK for spread betting. It offers a tax-free way to speculate on 40 commodity markets. Long and short trading is available, not to mention leverage of up to 1:20. Gold can be traded against GBP and many other currencies, including USD, JPY, and EUR. Pepperstone also offers a huge range of agricultural commodities.
This covers everything from sugar, corn, and cattle to lumber, oats, and soybean. There are no minimum deposit requirements at Pepperstone. GBP payments are processed fee-free. This includes Visa and MasterCard deposits. Spread betting accounts come without commissions.
That said, spreads are a lot more volatile than other commodities brokers. For example, the minimum spread advertised when spread betting gold is 0.05 points. However, the average is much higher at 0.16 points. Nonetheless, Pepperstone also offers commodity CFDs. These come with tighter spreads but CFD profits are subject to capital gains tax.
Pros
Cons
75.1% of retail investor accounts lose money when trading spread bets and CFDs with this provider
What is a Commodity Broker?
Commodity brokers enable traders to speculate on commodities like gold, oil, and wheat. Most brokers offer commodity ‘derivatives,’ meaning traders don’t own the underlying asset. Instead, derivatives (such as CFDs and spread betting) track commodity prices in real time.
This provides several benefits. For a start, UK traders can go long or short on their preferred commodity. This means you can speculate that prices will rise or fall. Additionally, derivatives provide retail traders with leverage. The maximum leverage available to UK retail clients is 1:20 on gold and 1:10 on other commodity markets.
Crucially, by not owning the underlying asset, you don’t need to worry about transporting or storing commodities. Ultimately, commodity brokers match buyers and sellers and collect a commission or spread whenever trades are placed. The market couldn’t be easier to access, especially when using an FCA-regulated platform.
Types of Commodities You Can Trade
Most online brokers split commodities into three key categories: metals, energies, and agriculture.
Here’s an overview of the main markets:
- Metals: The two most popular metals traded online are gold and silver. Less popular and more volatile markets include palladium, platinum, silver, zinc, nickel, and aluminum.
- Energies: UK traders can speculate on global oil prices, including Brent and WTI. Natural gas is another popular market.
- Agriculture: It’s also possible to trade agricultural products that are bought and sold globally. This includes everything from sugar, wheat, and corn to soybean, cattle, lumber, and oats
Do note that commodities are also split into ‘soft’ and ‘hard’.
- Hard Commodities: This includes commodities that must be mined or extracted. Hard commodities cover metals and energies.
- Soft Commodities: This includes agricultural products and livestock.
What Drives Commodity Prices?
- Various factors drive global commodity prices and you understand them all before trading.
- At their core, prices are determined by demand and supply.
- Sub-factors include economic growth, interest rates, currency exchange movements, inflation, and geopolitical events.
- Knowing what influences prices will help you become a better trader.
- As such, it’s best to niche down into a specific commodity market, whether that’s Brent oil, wheat, or gold.
Ways of Trading Commodities
Commodities can be traded in various ways, including CFDs and spread betting, ETFs, and futures.
Let’s take a closer look at the main financial instruments available to UK traders.
CFDs
The most common way of trading commodities in the UK is via CFDs (contracts-for-differences). These instruments merely track real-time commodity prices, providing seamless exposure to the market.
For example, suppose the gold spot price is $2,690, and it increases to $2,701 a few minutes later. Gold CFDs should mirror the same movement. Commodity CFDs are usually commission-free, so it’s only the spread to pay.
What’s more, you can trade commodity CFDs with leverage, and both long and short trading is available.
Spread Betting
Spread betting, like CFDs, are derivative products. They enable UK traders to speculate on commodities without taking ownership. They invite long and short trading plus leverage of up to 1:20.
The key difference is that spread betting profits are tax-free. This means you’ll avoid paying capital gains tax on successful commodity positions.
ETF Investing
Most commodity traders in the UK opt for short-term trading strategies. This includes swing trading, day trading, and scalping. However, those preferring longer-term trades might consider commodity ETFs (exchange-traded funds).
In summary, ETFs are backed by the underlying commodity, which means their share price closely aligns with spot price movements. For example, we mentioned earlier that the SPDR Gold ETF is backed by gold bullion.
This means you can invest in gold for months or years without needing to worry about storage. ETFs trade on traditional stock exchanges, so can be cashed out during standard market hours. Gold is just one example. ETFs also provide exposure to silver, wheat, oil, and more.
Mutual Funds Investing
Mutual funds are similar to ETFs in that they provide indirect exposure to commodities. However, the key difference is that mutual funds aim to outperform the commodity benchmark, while ETFs merely aim to replicate it.
Mutual funds often short-sell commodities if they believe prices will fall. This requires more complex financial products, such as futures and options. However, mutual funds often come with much higher minimums than ETFs.
Individual Stocks
An alternative way to gain exposure to commodities is via individual stocks. This is a riskier approach, but the returns can exceed spot price movements. For example, suppose you’re bullish on oil.
Instead of trading CFDs, you could invest in oil companies like BP or ConocoPhillips. In theory, oil price increases will benefit these companies. However, other factors come into play, such as the cost per barrel, debt repayments, and dividend obligations.
Futures
Another way to trade commodities is via futures contracts. These instruments come with expiry dates, often weekly, monthly, or quarterly. Trades speculate whether the commodity will be worth more or less than the strike price.
- For example, suppose the strike price for silver is $33 per ounce.
- You believe silver will be worth more in three months’ time, so you purchase long contracts.
- Silver is priced at $40 per ounce when the contracts expire.
- This means you’ve made $7 for each purchased contract.
However, futures are risky when they’re settled in the underlying asset. Those holding contracts on expiry are legally obligated to take delivery.
Options
Options are derivative products like futures, but they’re considered less risky. For a start, they give traders the ‘option’ but not the ‘obligation’ to purchase or sell the underlying asset. Traders risk a premium when entering a position.
This is typically a small percentage of the overall trade size. The premium is the only amount traders can lose. Most options brokers offer various strike prices and expiry dates, so they’re also more flexible than futures.
DMA
Often reserved for institutional investors, DMA (direct market access) is another way to trade commodities. This method directly matches buyers and sellers without intermediaries.
This often means traders get the best market rates. That said, most DMA accounts offer commodity futures, so you’re still trading derivative products.
Pros & Cons of Trading Commodities
Consider the following benefits and drawbacks before trading commodities in the UK:
Pros
Cons
How to Choose a Commodities Broker
These factors should be considered when researching the best UK commodities brokers:
- Security and Regulation: It’s best to trade via FCA-regulated brokers. These platforms must comply with strict licensing rules, especially regarding retail client protection. Your funds will also be segregated from the broker’s primary bank account, adding an extra safety net to your investments.
- Supported Commodities: Check which commodity markets the broker supported. The best platforms offer dozens of commodities, ranging from gold, wheat, and platinum to oil, sugar, and silver. You might also consider trading other products, such as shares, indices, forex, and the best altcoins.
- Financial Instruments Commodities: Just as important is understanding which financial instruments you’ll be trading. One of the best options in the UK is CFDs, although spread betting is also worth considering. After all, spread betting profits are tax-free. Long-term investors should explore ETFs and mutual funds.
- Payments and Minimums: Ensure your chosen commodity broker supports convenient payment methods. This often includes local bank transfers, e-wallets, and debit/credit cards. Check the minimum deposit requirement to ensure it aligns with your investment budget. You should also assess whether deposit/withdrawal fees are charged.
- Trading Commissions and Spreads: The top UK commodities brokers offer commission-free trading, typically via CFDs or spread betting. However, spreads can’t be avoided. The wider the spread, the more you’re indirectly paying to trade.
- Analysis and Research Tools: We prefer commodities brokers that offer comprehensive analysis tools. Technical traders should look for advanced charts and economic indicators. Those opting for a fundamental research strategy should explore economic data, expert insights, and financial news.
- Automated Investing: Beginners might choose a commodity broker offering automated investing tools. eToro, for example, is one of the best copy trading platforms. It enables users to replicate an experienced trader. If the chosen trader buys gold, you’ll automatically buy gold too.
- Leverage: It’s also worth checking whether leverage is available should you wish to trade with more than your budget allows. However, do remember that the maximum leverage limit when trading gold is 1:20 and 1:10 for all other commodities.
- Mobile Trading: The commodity markets are fast-paced, so it’s crucial to choose a broker with a native mobile app. This will provide the opportunity to open or close a position at a moment’s notice. Ensure the app is user-friendly and that it offers full functionality, including trading, analysis, and payments.
How to Start Trading Commodities in the UK
Follow these steps to start trading commodities online.
- Step 1: Decide Which Commodities to Trade – First, spend some time researching the different types of commodities, including metals, energies, and agricultural products. It’s best to niche down to a single market rather than attempting to trade the entire sector.
- Step 2: Choose a Commodity Broker—Next, choose an online broker that supports your preferred commodity. Beginners might like eToro for its user-friendly dashboard. What’s more, eToro is regulated by the FCA and supports 34 commodity markets.
- Step 3: Open an Account – Now visit the eToro website (or your chosen broker) to open an account. Provide some personal information and contact details. You’ll also need to provide a copy of a passport or driver’s license.
- Step 4: Trade in Demo Mode—eToro offers a free demo account with unlimited usage. It’s crucial to remain in demo mode until you consistently make profits. Use the analysis tools available, such as insights and indicators.
- Step 5: Decide How Much to Risk and Deposit Funds – Once you’ve spent ample time in demo mode, it’s time to move into the live commodity markets. Assess how much capital you’re comfortable risking and make a deposit. Do note that eToro has a minimum requirement of $100 (about £77).
- Step 6: Set up a Commodity Trading Order – Now, search for the commodity you want to trade and choose from a long or short position. Type in the amount of risk on this particular trade. You can also apply leverage, although ensure you consider the risks before proceeding.
- Step 7: Enter Stop-Loss Order – We’d also suggest setting up a stop-loss order. This will minimize losses on unsuccessful trades. For example, if the stop-loss is set at 3%, the most you can lose is 3%. The trade will automatically be closed if the stop-loss level is triggered.
- Step 8: Confirm Orders – Finally, confirm the orders, and eToro will execute them instantly.
Conclusion
In summary, the best commodities brokers in the UK offer active traders a safe and cost-effective experience. We prefer FCA-regulated platforms like eToro, which offers a desktop and mobile trading dashboard with 34 commodity markets.
UK traders can speculate on soft and hard commodities on a spread-only basis, and eToro offers a free demo account ideal for practice trading. The platform also supports other trading markets, including indices, forex, and shares.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more
FAQs
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References
- Commodity – FCA handbook (FCA)
- The tax-free perk is one of the spread bet’s unique selling point to investors, even though it only applies to UK tax-payers (London School of Economics)
- FCA confirms permanent restrictions on the sale of CFDs and CFD-like options to retail consumers (FCA)
- Gold / US Dollar Spot (CNBC)
- CASS 7.13 Segregation of client money FCA handbook (FCA)