over 2 years ago • 1 min
Uranium-related stocks surged for a second day on Monday, pushing the Global X Uranium exchange traded fund (ticker: URA) to the highest level since 2014, as retail traders grew excited about the radioactive metal’s prospects.
Australian-listed uranium miners Peninsula Energy, Energy Resources of Australia, and Bannerman Energy all closed more than 25% higher. UK-listed stocks Aura Energy and Yellow Cake gained more than 10%. Canada’s Cameco advanced 4.2% as of 9am in Toronto and the Global X Uranium ETF increased 4.4% in pre-market New York trading.
Uranium appears to be attracting a cult following among some retail investors. Cameco was the third most discussed stock on Reddit’s WallStreetBets forum over the weekend, after GameStop and Apple, according to data from Quiver Quantitative. UraniumSqueeze, a Reddit community “dedicated to all the investors and traders passionate about the uranium market”, has grown to more than 13,000 members.
Uranium doesn’t trade on an open market like oil, copper, or wheat. Instead, buyers and sellers negotiate contracts privately and prices are published by independent market consultants.
Uranium prices have been depressed since the Fukushima nuclear accident rocked Japan a decade ago and hit demand for new nuclear reactors. The recent rally seems to have been driven by the Sprott Physical Uranium Trust, an exchange-traded product that aims to give investors exposure to the metal’s price, buying up uranium and announcing plans to raise cash for further purchases. The chart above shows the surge in the Sprott trust’s price (in blue) and trading volume (in pink) over the past week.
As we pointed out in April, this year’s rally in solar and wind stocks has left investments tied to nuclear power – which many analysts think will also be needed to tackle climate change – looking relatively attractive.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.