Growing numbers of retail investors are being drawn into commodity trading after two consecutive years of bumper returns, despite concerns that they could suffer huge losses or disrupt the complex and volatile markets.
Retail trading volumes in commodity futures and the largest commodity-focused investment funds surged in 2022. But while activity has been spurred by commodities’ much better recent record than that of stocks and bonds, some market participants and analysts have voiced fears about retail traders wading in to a highly volatile market dominated by specialised players.
Daily average trading volumes in CME’s micro contracts for gold, crude oil, silver and copper — which it uses as a proxy for retail activity — were up 93 per cent year on year as of the end of November.