Uranium is blasting off. And if you don’t believe me, believe Wall Street analysts, who say uranium has much higher to go by the end of the year. You can play this trend with the Sprott Uranium Miners ETF (URNM), says Sean Brodrick, editor at Weiss Ratings Daily.
The indicated settlement price of uranium was recently more than $70 a pound. That’s the highest level since January 2011. You may recall that is when a tsunami and resulting meltdown at the Fukushima nuclear power plant caused the price of uranium to crater.
This time, we are seeing demand surge as new atomic reactors come online, and more are planned. There are now 434 operational reactors globally, with 59 under construction and 111 planned. Heck, even Japan — which suffered the most from the Fukushima disaster — is restarting many of its nuclear power plants.
In 2021, global demand for uranium from nuclear reactors was estimated at 62,500 metric tons. By 2030, that’s forecast to rise to 79,400 metric tons…and by 2040, 112,300 metric tons. Even the shorter term is quite bright. Demand for uranium in nuclear reactors is expected to surge 28% by 2030. That’s just seven years away.
The price of uranium is up more than 40% since the start of the year, and Wall Street analysts are putting an $80 price target on the energy metal for the end of the year.
That’s fine as far as it goes…but they just can’t think big enough. I believe uranium is easily going back to its high of $137 a pound, last seen in 2007.
After all, from January 2005 — well after the last uranium bull started — the energy metal soared 833% in a little over two years to hit the old high. History doesn’t repeat, but it often rhymes. When uranium rallies, it can MOVE!
In the shorter term, the squeeze could come fast and furious. Analysts at nuclear fuel market tracker UxC report that utilities are accelerating uranium purchases. So far, they’ve contracted 107 million pounds year to date. That puts utility uranium demand on track to exceed last year, when demand hit a 10-year high.
You may want to target URNM to profit. The ETF has an expense ratio of 0.85%. It owns Cameco (CCJ) along with Kazatomprom, which is Kazakhstan's national uranium company, and many more top names.
Sprott Uranium Miners ETF (URNM)
You don’t have to chase it — just wait for a pullback to the 10-day moving average. URNM touches that moving average pretty regularly.
Sure, URNM could pull back BELOW the moving average. Nothing is written in stone. But my working target on URNM is $80 — a 66% move higher from recent prices.
Recommended Action: Buy URNM.
