VIDEO — Rick Rule: Uranium Due for a Price Response, Silver's Incredible Potential

Uranium Investing

Veteran investor and speculator Rick Rule also spoke about his overall economic outlook, saying he continues to play defense.

Rick Rule of Rule Investment Media has long said that Japanese reactor restarts will be key for the uranium industry. With restarts now firmly underway and other positive factors at play, he's expecting prices for the commodity to start rising.

"I think the combination of reduced supply, increased demand and the fact that a lot of the overhang is now in private hands — not available for sale — means that you're going to start seeing a price response in the uranium market. You are also going to see a much firmer term market," he said at the Vancouver Resource Investment Conference (VRIC).

Looking more closely at prices, Rule stressed the importance of the term market over the spot market.

"Most investors pay attention to the spot price because it's the only price available to them," he said. "(However,) increasingly the market is going to the term, meaning that people are buying uranium in five or six year term contracts."

Term market prices are opaque, Rule continued, meaning that they're not available to the average person. With that in mind, he encouraged market participants to start paying attention to quarterly income statements from major uranium companies. By looking at pounds produced and top-line sales, it will be possible to deduce the realized prices they receive.

"This is going to bedevil investors because they're used to looking in the Wall Street Journal, or some other place, and seeing the spot market for uranium and thinking that the spot market price is indicative of something. Increasingly it's indicative of less and less and less," said Rule. In his view, the real uranium price right now is the spot price plus US$5 or US$6.

He also spoke about the importance of being educated on silver, a topic that will be covered in his upcoming Silver Bootcamp. His main goal at the event is to outline market dynamics and encourage people from investing based on narrative.

Watch the interview above for more from Rule on uranium and silver, plus his overall economic outlook. You can also click here for the Investing News Network's full VRIC playlist on YouTube.

Don't forget to follow us @INN_Resource for real-time updates!

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.

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