We’ve talked about the Commodity Super Cycle – a major theme in the coming years. Uranium is on our list of commodities that stand to benefit from this cycle, and this is why our managers began investing in the sector earlier this year. Its price has exploded recently due to short term developments, but the long term fundamentals for the nuclear story are strong. ~ Sandor Kiss, Integrated Wealth Management
One week ago and about a year after we turned bullish on the uranium sector, which has more than doubled despite Democrats’ unwillingness to include uranium in their ESG umbrella, we presented readers with a unique take from Harris Kupperman, who explained how the Sprott Physical Uranium Trust could serve as a springboard to substantial further gains not only in the price of uranium itself but also uranium-linked stocks and ETFs. Comparing its action to the positive feedback loop that emerged in the Grayscale Bitcoin Trust, which served as the springboard allowing bitcoin to rise from $10,000 a year ago to over $60,000 earlier this year, Kupperman said that the Sprott Trust had the potential to “upend” the illiquid uranium market by creating an actual physical shortage that would then translate to much higher prices, to wit:
The Sprott Physical Uranium Trust commonly (known as SRUUF), is the entity that has upended the uranium market. Since launching its ATM 13 days ago, it has acquired 2.7 million pounds of uranium. This is an average daily rate in excess of 200,000 pounds or roughly a third of global production on an annual basis. If GBTC is the roadmap to follow, as the price of uranium begins to appreciate, the inflows into the trust should accelerate. Interestingly, there are plenty of other entities also purchasing physical uranium, uranium that utilities were counting on for their future needs. The squeeze is on…read more.