In GnuCash, a commodity is anything that can be traded or held as a unit of value — currencies, stocks, mutual funds, and even physical goods. Every account in GnuCash is denominated in a commodity. Most accounts use a currency (USD, EUR), but investment accounts use securities as their commodity.
GnuCash tracks exchange rates and prices between commodities, which is how it handles multi-currency accounting and investment portfolio tracking. The price database stores historical prices for commodities, enabling cost basis calculations and unrealized gain/loss reports.