A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Examples include natural resources like oil, gold, and wheat. Commodities are often the building blocks for more complex products and are traded on various markets. Commodities can be categorized into two main types: hard commodities, which are natural resources that are mined or extracted, and soft commodities, which are agricultural products or livestock. The prices of commodities can fluctuate based on supply and demand, geopolitical events, and economic conditions.