Uranium remains in the spotlight, and that’s where this week’s update is going to start.
If you’ve been following along, you’ll remember that the market has been attracting attention since the Sprott Physical Uranium Trust (TSX:U.UN) came onto the scene and started buying up physical uranium.
I recently spoke with Justin Huhn of Uranium Insider, who took the time to explain where the market could go from here. He’s not a fan of making price predictions, but did say the commodity could “absolutely” rise as high as it did during the last cycle, when it peaked around US$140 per pound.
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“There’s really bullish price forecasts being thrown out there, and I think that we see a pretty fast-moving market probably in the next 18 to 24 months” — Justin Huhn, Uranium Insider
Justin also identified a number of factors that may be going unnoticed given all the Sprott trust excitement. Notably, he pointed to the “full-blown crisis” happening right now in Europe and in other parts of the world — in short, even beyond what’s happening with the Sprott trust, he thinks uranium market fundamentals look very positive.
“Sprott is exciting, it’s the shiny object in the room, but underpinning all of this is just a really fantastically growing fundamental setup, not only for the price of uranium, but just nuclear energy in general” — Justin Huhn, Uranium Insider
You can click here for the link to the full interview, and I really recommend you check it out if you’re interested in the uranium market and the mechanics of the Sprott trust.
With uranium in mind, we asked our Twitter followers this week if they’re investing in uranium explorers, developers or producers. We got a great response with over 1,500 votes, and by the time the poll closed developers were in the lead. However, many respondents wrote in to say that they’re focusing on all three types of companies; others said that they favor the royalty angle.
Although uranium is stealing the spotlight, we can’t forget about gold. This week brought ups and downs for the yellow metal, which started the period around US$1,760 per ounce before dropping to about the US$1,725 level. It was just under US$1,760 at the time of this writing on Friday (October 1) afternoon.
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Unfortunately for gold, that means it is finishing up the third quarter fairly flat, although it did move both higher and lower during the three month period.
Looking forward to the fourth and final quarter of 2021, many market watchers still think the precious metal could make a big move. I had the chance to speak recently with David Garofalo, who is perhaps best known for being at the helm of Goldcorp when it merged with Newmont (TSX:NGT,NYSE:NEM), and is now in charge at Gold Royalty (NYSEAMERICAN:GROY).
In his opinion, when gold hit US$850 in the 1970s, that was the real all-time high — and when that number is adjusted for inflation to today’s dollars, it comes to US$3,000. David thinks gold will reach that level during this cycle, and he doesn’t think it will take long. Here’s how he explained it:
“I see no reason in this inflationary environment — and this is not transitory, I don’t believe that for a moment. I believe inflation’s here to stay and it’s going to rival what we saw in the 1970s, and perhaps surpass it given the coordinated effort that’s occurring across all the central banks globally to debase currencies competitively and preserve export markets.
Gold at that time, at US$850 an ounce — that was the real all-time high, believe it or not, because if you inflation adjust that to today’s dollars that’s US$3,000 an ounce. That’s what I foresee in this cycle, and in the short term — I’m talking about months, not years away” — David Garofalo, Gold Royalty
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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