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Monday
Jul022007

At Last The Uranium Spot Price Declines - $3

Uranium Prices having been rising for 47 consecutive months and so it was only a matter of time before the price experienced a tick down.

But should this be treated in a negative way for uranium bulls?

We think not. The fact is that the uranium price only fell $3, from $138 to $135 per pound, a very small decrease. Also, although TradeTech's indicator has fallen, the uranium spot price at UXC has not. When TradeTech raised its indicator to $138/lb UXC only raised their price to $135, and it now stands at $136. Therefore this decline may have been the result of a overestimation of the uranium spot price. However, that aside a decline in prices had to come sooner or later and a consolidation was to be expected.

This could present another great buying opportunity, if uranium stocks open down today. However, uranium stocks, still haven't caught up with $80/lb uranium prices, let alone the three figure U3O8 price at the moment. Therefore even if the uranium price doesn't rise much more in the coming months, the stocks have to catch up with their underlying commodity which has soared.

We are seeing the transformation of a commodity. As more and more countries want to build nuclear power plants and buy uranium, the uranium industry is growing. If we look at other fuels such as oil and gas, the price goes up and down all day long. Uranium has been unique as prices are set each week and there is not much trade compared with other commodities. As this uranium bull market continues, there will be more fluctuations in price as trading volume increases. Therefore we are seeing uranium change from a rarely traded, hardly known about almost “secret” commodity, to a worldwide fuel, that will change in price much more frequently so we can expect more down ticks as well as up ticks.

The fundamentals for uranium remain the same and we remain very bullish on uranium stock maintaining our price target of $200/lb for uranium that we have held for a long time and have published since this website was launched.

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Reader Comments (4)

This will be very challenging year for uranium issues. It wiil prove to have been a great buy opp for 5 year holders.

July 3, 2007 | Unregistered Commenterpunter

Sorry - don't follow what you're driving at. Appreciate that the "wall of worry" is certainly evident for U stocks, but what do you mean by your second sentence? Do you mean U stocks HAVE BEEN a good buy and now it's over, or that it will prove to be a good time to ADD to existing holdings, or what?

July 4, 2007 | Unregistered Commenterbob

We are still bullish on both uranium and uranium stocks. We think that now is a good time to buy uranium stocks as they have not caught up with today's uranium price, let alone furture uranium prices, for which we have set a $200/lb target.

July 4, 2007 | Unregistered CommenterUranium Stocks

Thanks for the information. Here's my response if you find it of interest.
Commodity Trader Wall Calendar is an annual publication to help you keep track of your commodity trading activities irrespective of whichever commodities you are trading: agricultural (grains, and food and fiber), livestock & meat, energy, precious, rare & industrial metals, other minerals and materials.... This reference tool provides with a repository of the commodity and financial futures industry event data.

August 25, 2008 | Unregistered Commentercommodity calendar

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