Catch up and get informed with this week’s content highlights from Charlotte McLeod, our editorial director.
This week’s update starts off with uranium for a change — and for good reason.
Prices have recently jumped to the highest level seen in six years, with the increase largely attributed to buying from the Sprott Physical Uranium Trust (TSX:U.UN).
The trust was designed to provide exposure to physical uranium, and has been a major topic of conversation since its launch this past the summer.
As Adam Rozencwajg of Goehring & Rozencwajg explained to me, buying from the trust is exacerbating an already tight supply/demand balance in the sector, and he expects even higher future prices.
“We’ve been running a massive deficit of primary uranium for the last two years, and I think that now it’s going to start to work its way into higher prices” — Adam Rozencwajg, Goehring & Rozencwajg
Our Twitter audience does too. With uranium in mind, we asked our followers this week where they see the commodity by the end of 2021. By the time the poll closed, the majority had voted for the US$50 to US$60 per pound range, although 17.6 percent said they believe it will be above US$70.
Moving over to the precious metals, it was a week of downward momentum for gold. The yellow metal was trading just under US$1,790 per ounce at the time of this writing on Friday (September 10) afternoon, and has now wrapped up a summer that left many investors wanting more.
The story was similar for silver, which like gold spent time in the doldrums this summer, trading between about US$23 and US$26.50 per ounce during July and August.
Many experts think the future looks brighter. In a recent conversation, Chris Marchese of GoldSeek and SilverSeek told me he’s bullish on the white metal, and thinks that once it moves past the US$30 or US$31 level it will then be able to push higher to US$50 to US$60.
However, he emphasized that silver will need to stay solidly above US$30 for some time before it can catapult higher — in other words, moving above that point for only a day won’t cut it.
“(Silver) needs to at least close the week, month and quarter above US$30, and once that happens I think all systems are go for US$50 to US$60 silver” — Chris Marchese, GoldSeek and SilverSeek
Semiconductors are a key part of these high-tech systems, and COVID-19 restrictions have put pressure on manufacturing, most of which happens in Asia. In addition to that, last year brought unprecedented demand in the gaming industry as consumers spent money on indoor entertainment during lockdowns.
Those and other factors, including higher activity from cryptocurrency miners, have combined to make it tough for buyers to get their hands on the latest systems. Whether there’s an end in sight remains to be seen — at the moment, experts are still predicting strong demand in the gaming sector for 2021, meaning companies may keep struggling to get products to gamers.
“It’s hard to get visibility on what the long-term solution is going to be. But for the next year, for the foreseeable future, I think there’s still a ton of demand” — John Patrick Lee, VanEck
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.