Uranium Stocks Surge On Flurry Of Producer Purchases In The Spot Market

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It wasn't just GLJ that noticed the flurry of spot market purchases: in a note from Red Cloud analyst David Talbot, he writes that "uranium miners buying the physical commodity in the spot market, with the expectation of higher prices in the future, is something new in the sector and positive for prices" adding that "we can’t recall seeing uranium producers enter the market with such vigor with the intent of holding physical uranium."

The report went on to note that these purchases by experienced uranium miners "show that they have become confident enough to speculate on the expected upwards trajectory of uranium price" and that they are "putting their money where their mouth is."

Following the reports of spot buying as well as the bullish sentiment, uranium stocks surged, with UEC rose as much as 35%, DML CN fell 9.8% intraday; among other peers, NXE CN was up as much as 9.8%, EFR CN +9.1% (before paring most of the gains) and CCJ +5.9%.

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Expect much more upside if indeed the producers now are putting their money where their mouth is and are betting on much higher spot prices in the future.

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