All guides · Analysis methods
Fundamental Analysis
Evaluating supply, demand, inventories, and macro drivers that shape a commodity’s fair value path.
What it is
Fundamental analysis evaluates the intrinsic value of an asset by examining economic, financial, and other qualitative and quantitative factors. For commodities, this includes supply/demand dynamics, production costs, inventory levels, economic growth, inflation, and geopolitical factors.
Why it matters
Fundamental analysis helps understand why prices move and whether current prices are justified by underlying factors. It's particularly important for longer-term positions and understanding major market trends. Fundamentals can drive long-term price direction, while technicals help with timing.
How traders use it
Use fundamental analysis to determine the overall direction and value of an asset. For example, if gold supply is declining while demand is rising, fundamentals suggest higher prices long-term. Combine with technical analysis for entry timing. Monitor key reports like inventory data, production numbers, and economic indicators.
Example
If oil inventories are declining, global demand is rising, and production is constrained, fundamental analysis suggests bullish long-term prospects. However, use technical analysis to time entries rather than buying immediately.
Deeper context
Commercial COT flows often embed fundamental views because hedgers live in the physical market. Still, read inventories and policy headlines yourself. PositionAlpha’s news and sentiment tools (Pro) help scan catalysts; they do not replace primary sources.