Where to buy commodities

First, decide what you actually want to own

• The physical thing (coins, bars, a tank of fuel, a lot of grain). You pay for storage, insurance and transport, and you sell it back at a dealer's buy price, which is usually below their sell price.
• A contract on the price (futures and options). You don't own the commodity. Futures are leveraged: a small deposit controls a large amount, so losses can be larger than the money you put in.
• Shares in a fund that holds or tracks the commodity (exchange-traded products). You own fund shares, not the commodity. The fund's documents say what it holds, what it charges and whether it tracks the price directly or through futures.

Each of these is sold through a different kind of venue, with a different licence.

The kinds of venues

Bullion dealers and mints (gold, silver, platinum coins and bars)

Sell physical metal, online or over the counter. What to check:

• The premium: how far their price is above the market reference price, and their buy-back price if you sell later.
• Recognised hallmarks or assay certificates on bars, and how authenticity is checked when you sell back.
• Storage: "allocated" storage means specific bars are held in your name; "unallocated" usually means you are owed metal by the provider, so its finances matter.
• Identity checks for larger purchases are normal under anti-money-laundering rules in many countries. A dealer that offers to skip them is a warning sign.

In many countries precious-metal dealers need no investment licence at all, but they may have to register for anti-money-laundering supervision. Ask the dealer which authority supervises them and check it.

Regulated futures and options brokers

Give access to commodity exchanges. You can't usually trade on an exchange directly: you go through a broker that is a member of the exchange, or through one that works with a member. The broker must be licensed by the market regulator in its country.

Securities brokers (for exchange-traded commodity products)

Sell shares of commodity funds and notes listed on stock exchanges. Licensed by the securities regulator. Read the product's key information document: it should say whether the product is backed by the physical commodity or by futures, and what it costs each year.

Physical trade between businesses (grain, coffee, cocoa, metals, fertilizer)

Larger physical lots move through traders, cooperatives and warehouses under written contracts that set grade, quantity, delivery point and inspection. These are business deals, usually with inspection certificates and, for stored grain, warehouse receipts. Get local legal and trade advice before signing one.

How to check a licence

Look the firm up on the regulator's own register before you send money. Check that the name, registration number, address and website on the register match the firm you are dealing with exactly. Copycat firms often borrow a real firm's name and number. Reach the register by typing the regulator's address yourself rather than by clicking a link the firm sent you.

Warning signs

• Promises of guaranteed or "risk-free" returns, or pressure to decide today.
• Someone who contacted you first, by phone, social media or a dating or messaging app.
• Payment only by crypto, gift card or wire to a personal account.
• "Storage" of metal you can't inspect, with no named vault or independent audit.
• A firm you can't find on the regulator's register, or whose details don't match it.