Sprott Physical Uranium Trust (SRUUF) broke support at 18.50 and is now retracing to test the new resistance level. Respect is likely and would signal a bear market for uranium.
The bear market is related to short- to medium-term demand and supply. Long-term demand for U308 is projected to grow by more than 50% by 2040, whereas supply — including restarted idle capacity and new mines planned and under development — is forecast to shrink to less than 50% of supply over the same time frame.
Conclusion
Respect of resistance at 18.50 by the Sprott Physical Uranium Trust (SRUUF) would confirm a bear market for uranium.
As with copper, we are long-term bulls on uranium and other resources required for the transition to low CO2 energy. A bear market in uranium would provide an opportunity to build a long-term position at low prices.
Notes
- The Rook 1 Project is a proposed new uranium mine and mill development located in northwestern Saskatchewan, Canada.
Acknowledgements
- Prof. John Quakes/Cantor Fitzgerald: Uranium Demand & Supply Projections
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.