URNM: The Uranium Bull Thesis Is Getting Stronger

RHJ Since the beginning of H2’22, most commodities are struggling. Fears of a global economic slowdown are making investors nervous and they are leaving the sector. This could be best observed by looking at the meltdown in AUM of the Invesco DB Commodity Index Tracking Fund ETF ( DBC ), which is currently nearly 60% off its peak at US$2B. Data by YCharts However, not all commodities are the same in terms of sensitivity to the economic cycle. One notorious exception is uranium. The yellow metal’s primary use is electricity generation, which is mostly done by government backed utilities, where bankruptcy risk is very low. What’s more, the actual price of uranium is a fraction of electricity costs, so demand is fairly inelastic. With public opinion around the world warming up towards nuclear energy and its net-zero characteristics, demand should increase substantially in the following decades. On the supply […]

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