Uranium stocks have been buzzing hot since the Russia-Ukraine war broke out. They were rising even before the war as uranium prices surged in August 2021. What caused this surge? Should you buy uranium stocks at their high? How to trade in commodity stocks?
Uranium is a commodity. Its price is determined by demand and supply forces. The price is around $50, a level last seen in 2012. This is the second straight year of price surges for this commodity.
When there is an under-supply, commodity prices start rising. But there comes a point when the price surges to a level where the producer gets an incentive to boost output to meet demand. At that point, the commodity price witnesses a correction and the price stabilizes. Hence, commodities are cyclical and are sensitive to demand and supply.
With uranium, there are several other complexities attached. Utilities are a major consumer […]
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