Uranium Outlook

Uranium might be the biggest no brainer out there. Anyone who has taken freshmen microeconomics and knows how a supply and demand graph works could look at the data regarding uranium and come to some quite positive conclusions. It is simple, there is a whole lot of demand and not a whole lot of supply. This major shortage has shown in the price of uranium. This year uranium price has increased 70% and is now trading at $65 /pound. Over the past 3 months is has increased 70%. The nuclear fuel hasn't had a down month in over 5 years. It is currently trading at a 26+ year high and has outperformed the eight most popular precious and base metals (gold, silver, platinum, palladium, aluminum, copper, zinc, and nickel.) According to most popular theories, this is just the beginning. Most people see another 100% rise in Uranium over the next few years.

Right now, around the world, there are 28 new nuclear reactors under construction, with plans of another 62 to be built. By 2010 Japan looks to have 11 more reactors and China looks to have between 24-30 more nuclear reactors by the year 2020. This is the driving steam behind the nuclear fuel.

Like I said, there is a huge gap between uranium supply and demand. There is about 180 million pounds of demand for uranium and only about 140 million pounds of suppy available. Being that the uranium isn't going to just appear out of thin air, there needs to be new sources of production. When the price of uranium was in the single digits, it forced many of the mining companies out of business. The problem is that mines don't just appear over night. It takes capital, exploration, management, drilling, and finally milling the final product called "yellow cakes." These numbers show a shortage of uranium until AT LEAST 2013.

This year alone in the U.S. we have increased uranium production by 63%. In my opinion, uranium spot price won't react with the same action that precious metals will this upcoming year. Being that my funds are limited, I will contiune to put money into gold/silver during the rest of 2006. This is because I feel action in the precious metals market will kick into gear faster and harder than uranium. Uranium prices will be held back until the public realizes the severity of the shortage in the nuclear fuel. In the mean time there is no safer investment than uranium. I am invested in a company called Uranium Resources, but there are a few others that I feel are quite promising. If you would like to know more feel free to email me. I am always more than willing to take reader questions.

I would like to say that I am NOT a financial planner and encourage the readers to do their own due dilligence and research. I share what I know and what I research with you, but, like I said, do research. There is a lot of money to be made here. The train hasn't left the station yet, but I can here them yelling "last call for boarding."