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Top Stories This Week: Gold Maintains Gains, Uranium Mania Still to Come
Jan. 20, 2023 12:30PM PST
Gold stayed strong in the third week of the new year. Meanwhile, Justin Huhn of Uranium Insider shared his outlook for the uranium market in 2023, saying its "mania phase" is still ahead.
As the third week of the new year wraps up, gold's momentum remains strong. After breaking the US$1,900 per ounce mark last week, the yellow metal has kept above that level, ending Friday (January 20) around US$1,925.
December's producer price index (PPI) data was in the headlines this week, with a decline of 0.5 percent month-on-month and a year-on-year increase of 6.2 percent. The 0.5 percent fall was the largest since the start of the COVID-19.
The PPI looks at final demand prices across a wide variety of categories and is meant to measure inflation at the wholesale level. It's different from the consumer price index, which measures changes in the prices consumers pay for goods and services.
Although the new PPI numbers indicate that inflation is easing, market watchers still have questions about what the US Federal Reserve will do with interest rates at its next meeting, which is scheduled for the end of January.
Uranium bull market now in third inning
It's been awhile since we had the chance to speak about uranium, but I recently heard from Justin Huhn of Uranium Insider. He shared his 2022 takeaways, as well as his thoughts on where the uranium sector could be headed in 2023.
Looking back at the last 12 months, Justin described the period as a time of "de-risking." With positive nuclear energy news piling up and uranium supply and demand dynamics tightening, he thinks the thesis for being long uranium miners is stronger than ever.
So what's next in 2023? Although the U3O8 spot price rose about 13 percent year-on-year in 2022, market participants are still waiting for a larger breakout. They're also waiting to see beleaguered uranium equities start moving up.
Justin believes the uranium bull market is now in its third inning after taking off in December 2020 and then reaching inning one or two in 2021 as the the Sprott Physical Uranium Trust (TSX:U.UN) boosted momentum. He's bullish in the long term, but emphasized that the path forward will be volatile — those who want to move in and out of the market will have to be precise with their trades, while investors who are in it for the long haul will have to tolerate 30 percent drawdowns once a year or so.
"I think we've got a long ways to go, and in these types of markets the mania phase usually happens in inning eight and nine. So there's a lot of excitement ahead of us still" — Justin Huhn, Uranium Insider
I definitely recommend checking out the interview with Justin if you're interested in uranium, especially if you want more details on the overall nuclear fuel cycle. Click here to watch it on YouTube.
Want more YouTube content? Check out our expert market commentary playlist, which features interviews with key figures in the resource space. If there's someone you'd like to see us interview, please send an email to cmcleod@investingnews.com.
And 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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