In India, retail traders can trade four broad families of commodities: bullion (gold, silver), energy (crude oil, natural gas), base metals (copper, zinc, aluminium and others) and select agricultural commodities. Most of this trading happens through futures and options on commodity exchanges like MCX and NSE's commodity derivatives segment (NSE Commodities); exactly which contracts each exchange lists is set by that exchange, so check its current contract list.
What are the four commodity families?
| Family | What trades | What mainly drives prices |
|---|---|---|
| Bullion | Gold, silver | Global prices, USD-INR, interest rates, festival and wedding demand |
| Energy | Crude oil, natural gas | Global supply decisions, inventories, geopolitics, weather |
| Base metals | Copper, zinc, aluminium, lead, nickel, steel rebar | Industrial demand, construction and manufacturing cycles, global growth |
| Agri | Cardamom, cotton, kapas, cottonseed oil, mentha oil | Monsoon and crop output, government policy, export demand |
Each family has its own character, and that matters more than beginners expect. A gold trader watches central banks and the rupee; a natural gas trader watches American weather forecasts. Same market, very different homework.
Bullion — gold and silver
Bullion is where most Indian commodity traders start, because the underlying is familiar. Prices track international gold and silver markets closely, converted through the USD-INR exchange rate — so the rupee's moves matter as much as the metal's. Silver adds an industrial twist: it is used in electronics and solar panels, so it behaves partly like a precious metal and partly like an industrial one. The full story is in what moves gold and silver prices.
Energy — crude oil and natural gas
Energy contracts track global benchmarks and react to supply announcements, weekly inventory data and geopolitical events. They are among the most actively traded contracts on MCX — and among the most volatile. Natural gas in particular has a reputation for sharp, fast moves. Before trading this family, read what moves crude oil and natural gas prices.
Base metals — the industrial pulse
Copper, zinc, aluminium and their cousins are the raw materials of construction, power infrastructure and manufacturing. Their prices rise and fall with global industrial activity — copper is sometimes called "Dr. Copper" because its price is treated as a health check on the world economy. When Kavita reads that global manufacturing is slowing, she knows base metal prices usually feel it first.
Agri commodities — weather and policy
Agricultural contracts depend on the monsoon, sowing and harvest cycles, and government decisions on exports, imports and stock limits. Policy can change an agri commodity's outlook overnight, and from time to time the regulator has suspended trading in specific agri contracts altogether. Agri trading on MCX is a smaller, more specialised corner; a larger share of agri derivatives trades on NCDEX, a separate agri-focused exchange.
What does NSE Commodities list?
NSE Commodities currently lists derivatives on gold and silver, WTI and Brent crude oil, natural gas and Indian natural gas, the base metals (copper, aluminium, lead, zinc, nickel) — and Electricity Futures, a newer product type outside the four classic families, where the underlying is power prices (MCX lists an electricity contract too). Its agri list is a single contract, crude degummed soybean oil, so agri traders will find far more choice elsewhere.
Can I trade a basket instead of a single commodity?
Yes — MCX lists two commodity index futures, one on a bullion index and one on a base metals index. Instead of tracking a single contract, each follows a basket of MCX's own near-month futures: the bullion index moves with gold and silver, the base metals index with aluminium, copper, lead and zinc. The weights are set by the index and rebalanced once a year.
Two things make them different from the contracts above. They are cash settled, so physical delivery never enters the picture. And one lot is defined as a fixed rupee multiplier times the index level rather than a quantity of metal — so there is no "lot size in kilograms" to reason about.
For someone who wants exposure to bullion or industrial metals as a theme rather than a view on one specific metal, an index contract does in one trade what would otherwise take several. It is still a leveraged futures contract with an expiry, and the diversification only spans the basket — a broad sell-off in metals hits every constituent at once.
Do I trade the physical goods?
No. You trade standardised futures and options contracts whose value moves with the commodity's price. Some contracts can end in physical delivery if held to expiry, but retail traders almost always square off — close the position — before that stage. How do commodity futures work walks through the mechanics.
Things to keep in mind
- The four families respond to different drivers — pick one, learn its rhythm, and only then branch out.
- Energy and base metal prices largely follow international markets, so big moves often happen in the Indian evening session.
- Agri commodities carry policy risk on top of weather risk; rules can change with little warning.
- Every family trades through leveraged contracts — a "familiar" underlying like gold does not make the instrument any less risky.
Read next
Who uses commodity markets — hedgers, speculators and arbitrageurs? — You know what trades. Next: who is on the other side of your order, and why they are there.