Uranium performs while gold disappoints

Uranium performs while gold disappoints

Uranium was the standout in what was otherwise a mixed week. Uranium share prices strengthened in the previous week, in anticipation that life was starting to appear in the uranium price. On Thursday this week the uranium price spiked US$5.25/lb to hit US$39/lb, being a 26% improvement on the US$31/lb price in August.

What we don't know yet is how far the speculators will push the uranium price in this run. There is the risk that stock market punters will jump into uranium stocks as a reaction to the commodity price move, only to find that they have bought at the top of an intermediate high. The best rewards, as usual, will go to those traders who already had a position two weeks ago before this run. If you were one of these, you will be asking yourself whether you should take profits, or hang in for the longer term big picture.

Gold turned the other cheek last week, making it the fourth time it has tried and failed to break through US$1,830/oz. That gives the shorters a chance to drive it down for the time being. The safe haven argument is off the table for the time being, but is that for a few days or a few weeks? Which way will the pendulum swing on interest rates and stimulus? All these topics will have an influence on the gold price.

This week we cover TSX-listed companies; a high quality exploration company with a close association with B2Gold, a royalty company with a strong track record and a junior with a 25% carried interest in a 3.2 Moz gold project.