Even though the rapid spread of the COVID-19 Delta variant has been worrying investors, interest in commodities is soaring. That’s because President Biden’s infrastructure bill makes the prospects bright for several commodities. Consequently, we think it could be wise to bet on quality commodities stocks, Rio Tinto (NYSE:RIO), Glencore (OTC:GLNCY), Fortescue Metals (FSUGY), and Vedanta (NYSE:VEDL). They are currently trading below their 52-week price highs but have immense growth potential. Let’s look closer.The rapid spread of the COVID-19 Delta variant has been worrying investors regarding its potential to slow the pace of economic recovery. However, investors’ interest in commodity stocks has been growing this year with the reopening of economic activities. This is evidenced by the Invesco DB Commodity Index Tracking Fund’s (DBC) 15% gains over the past six months.
Amid an inflationary environment, we think it could be wise to bet on quality commodity stocks as a hedging strategy. Furthermore, the $1 trillion infrastructure bill passed by the Senate on August 10, if passed into law, is expected to act as a catalyst for increased demand for several commodities.
Given this backdrop, it could be wise to bet on the shares of established commodities companies Rio Tinto Group (RIO), Glencore plc (GLNCY), Fortescue Metals Group Limited (OTC:FSUGY), and Vedanta Limited (VEDL). These stocks are currently trading below their recently hit price highs and are well-positioned to benefit from the increasing demand for commodities.