David Cates: What Is Going on with Uranium? (URA)

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June 19, 2017 6:22am NYSE:URA


From Collin Kettell: The uranium market has always been volatile, we are still on the right side of the bottom, and are clawing back to a regular place where the uranium market will function.

There was some strong volatility at the start of the year, with the price having risen from a thirteen year low. We know the market is oversupplied, even taking that into account, the price is still too low. It’s not priced on fundamentals and the sentiment is generally negative. Any price under twenty is completely irrational since the best mine in the world is not economically viable at that level.

It’s not easy to figure out the uranium market, its pretty thin and there are a lot of factors. During the last rally we had an organic bounce off of the $18 level. The KazAtomProm announcement showed how irrational the price had become. There was some definite price expectations by speculators, however the utilities did not continue buying. On the mining company side we saw uranium stocks double. Things can move quite quickly when there is a shift in price. This is a second opportunity to get in at these levels.

David gives us an update on Denison Mines, he says they are well capitalized having raised money in February. They have a fairly ambitious drilling program for the rest of the year, with more updates toward the end of the year. He discusses some other projects they are working on.

The Global X Uranium ETF (NYSE:URA) was unchanged in premarket trading Monday. Year-to-date, URA has declined -1.40%, versus a 8.55% rise in the benchmark S&P 500 index during the same period.

URA currently has an ETF Daily News SMART Grade of D (Sell), and is ranked #74 of 130 ETFs in the Commodity ETFs category.

This article is brought to you courtesy of Palisade Research.

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