Gwen Preston: Gold Gearing Up for Next Move, Safest Bets in Uranium
‘I think the next move up in gold is going to require the rate cut — we’ve had the expectation of the rate cut built into the price, that’s why we’ve gone up to new highs,’ she said at the Vancouver Resource Investment Conference (VRIC). ‘But we’re still really in that sideways trend … I think actually breaking through it will require the rate cut.’
Looking over to uranium, Preston said that although the price has moved substantially in recent months, the commodity’s supply/demand dynamics are such that it could ‘easily’ jump to US$140 per pound overnight.
In terms of supply, uranium has become a seller’s market. While companies are working to bring new mines online and restart idled production, the process won’t be quick. She sees some relief coming from hedge funds that bought uranium at low prices and are now ready to sell, but emphasized that the volumes they’ll be able to provide will be small.
There’s also the east/west divide in the sector. Preston noted that the US Senate is likely to approve a ban on Russian uranium imports — and if that happens, Russia will probably preemptively cut off sales of the material to the US.
‘There just isn’t supply … despite a few little setbacks that maybe create a trading range for a little while here to stabilize this huge price run that we’ve seen, I think (the price) will still go higher. I’m very confident that the price is going to end 2024 higher than the insane price that it began the year at. Because it’s not actually insane. It’s a valid representation of the lack of this essential commodity that the utilities need,’ she explained during the conversation.
In Preston’s view, the safest uranium stocks right now are those with growing US production — those include Uranium Energy (NYSEAMERICAN:UEC), enCore Energy (TSXV:EU,NASDAQ:EU) and Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU).
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.