This chapter is devoted to price formation and price trends in commodities. The chapter first discusses factors determining price levels, both in the short and long run. It thereafter turns to the blurred nature and instability of the short-run supply curve. The third focus is on price fluctuations in commodities, both the short-run instability as well as the long-run price trends. Fourth, alternative trading arrangements and their implications for price formation are explored. The final sections of the chapter discuss actual price quotations and the implications of exchange rates on commodity prices.