The uranium spot price continues to drift downwards to record a drop of $10/lb.
This data is brought to us courtesy of stockinterview who based their report on Friday’s issue of Nuclear Market Review compiled by TradeTech. If you can find the time please visit both of these web sites they are a mine of information.
To quote the editor of Nuclear Market Review, Treva Klingbiel,
“This decrease in the price is largely due to the presence throughout the month of sellers driven by cash requirements, such as the US Department of Energy (DOE).”
Please forgive us for being sarcastic but it would be true to form for a government department to find the bottom of the market and then make a sale. This reminds us of the ‘prudent’ British Chancellor, Gordon Brown who managed to find the bottom of the gold market before selling most of Britain’s gold reserves in a series of pre-announced auctions.
As a headline this is bad news however the long-term indicator remains unchanged at $95/lb. To us this long-term indicator is far important than spot price, which is subject to the daily knee jerk actions of all and sundry. As we have said previously the price has swung like a pendulum and is now the lowest it will be for the remainder of this year, in our humble opinion.
The communiqué goes on to say:
“However, long-term fundamentals still point to uranium supply shortages, with difficulties and hurdles ever present in the development and permitting stages for uranium mining companies.”
Uranium stocks may well be sold off today on the back of this news so for us it will be a case of take it on the chin, hold on tight and look for the odd bargain.