Commodities catch a breakUranium spent much of the last month decoupled from the swoon that equities and bonds markets suffered through, and it could be just the beginning.
- The Global X Uranium ETF is up nearly 7% this week as sentiment towards nuclear energy gets increasingly bullish and global countries invest in the new trend – Germany is extending two nuclear power plants, France announced construction plans for five new nuclear plants, and uranium giant Cameco has filed for a $1.5bn shelf offering to use for M&A.
- All of this hints at the start of a bullish trend for the precious metal, and as more countries begin to bring their nuclear energy infrastructure up to a standard not seen since before the Fukushima disaster, uranium can “only go up” – according to Sprott's Ciampaglia, anyway.
- The entire commodities market caught a break on Wednesday, with oil, silver, copper, natural gas and gold all seeing modest gains on the back of a bullish reversal in the equities market, while the dollar declined – part of that was based on big changes from the UK’s central bank, but as Fed officials get ready to make remarks this week, that reversal could quickly turn.
An explosive comebackUranium stocks are on a hot streak as nuclear power becomes an intriguing alternative to the current energy crisis.
- Shares in major uranium miner Cameco popped just under 10% on Monday while the Global X Uranium ETF saw gains of around 7% – the commodity has been on somewhat of a bull run recently that helped Cameco stock pump 18% last week and the Uranium ETF lift over 10%.
- Countries are getting keen on uranium as an alternative energy source as a way to survive the Russia-induced gas and oil shortage. Japan, which was a key consumer of nuclear energy until Fukushima in 2011, said last week it’s open to building new nuclear power plants, and now Europe plans to roll back its plans to shut down some nuclear reactors.
- As seems to be common these days, Elon Musk was moving the market too, and said on Monday that he is pro-nuclear and that shutting down its nuclear power plants would be a bad idea for both the environment and national security. All this attention is bringing an end to a years-long bear market for the commodity that the Fukushima disaster kicked off, but will it last?