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Commodity ETFs Can Generate Profits as US Investing in Infrastructure

 Industrial commodity prices have been rising since hitting a significant bottom in early 2020. Since the start of the global pandemic, many raw materials markets have hit all-time or multi-year highs.



 Bull markets rarely move in a straight line; Adjustment can be very intense. Over the past months, China, the world's top consumer of the commodity, has tried to cool off the bullish action by selling strategic stocks of copper, aluminum, zinc, coal and crude oil. The selling softened some of the bullish action.


Meanwhile, the monetary policy of the world's central banks and the government's stimulus programs have caused inflationary pressure. While Chinese selling may have slowed commodity prices, they are still in an uptrend.


Last week, the United States pledged to rebuild its crumbling infrastructure with legislation that would lead to more than a trillion dollars in spending in the coming years. 

Commodities are the building blocks of infrastructure, and companies that provide goods and services can see their income grow in line with the law. 


The Global X U.S. Infrastructure Development ETF (NYSE: PAVE) holds shares in these companies that would benefit from the U.S. program.


Congress approves infrastructure rebuilding package
On November 15, US President Joseph Biden signed into law the $1.2 trillion bipartisan infrastructure bill. The act would put $550 billion in new money into transportation, broadband and utilities. 

The funds will rebuild dilapidated infrastructure in roads, bridges, tunnels, tunnels and other areas in need of replacement or upgrading. The funding is long overdue as past administrations and Congress negotiated legislation for the better part of a decade.

Lots of work and contracts coming
Rebuilding US infrastructure will create a lot of construction jobs, providing government contracts to companies in the field. Furthermore, since industrial and energy commodities are the cornerstones of infrastructure, spending trillions of dollars will increase demand for raw materials.

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