Uranium Contracting Speeds Up | Resource Heads Ep. 27

The markets went back to normal this week. That is to say, they went to running on bad news, and falling on good news.

The jobs market seems to be in a better-than-expected shape (more jobs, less unemployment), which might be suggesting that Powell & the gang have a shot at taming inflation without crashing the economy. Aka: the mainstream media is saying they’ll manage the soft(ish) landing, even though the US already had two consecutive quarters of GDP declines.

That belief resulted in higher prices for the risk-on assets, like broad market equities, while safe-haven assets like gold remained flat, and silver even closed the week lower.

What are experts saying about commodities?

• Lobo Tiggre told me that, ultimately, reality will matter and market participants will have to pay the price for being wrong, but in the near term, “markets don’t have to do what we think they should”. Lobo placed orders on 4 stocks this week, including some interesting uranium names. He shares his picks in his newsletter.
  
  
• Uranium Insider told me that “what’s coming for uranium has never been more clear”. He remains confident and expects to see a strong move in the price of uranium this year. This is because, generally speaking, the summer months are not great for the nuclear industry nor for the uranium stocks. However, come fall, there is much more going to be happening which has the potential to move the uranium market. Uranium Insider told me he thinks “that is more than likely to kick things off”. That’s why he is positioning when the market is not yet reacting to the rumours, instead of chasing the stocks when the market does react to the news.

What happened in commodities this week?

Commodities had a mixed week, starting off strongly and then falling into the jobs report on Friday, as the US dollar showed strenght against its equally worthless counterparts.

• Copper -0.60%
• Gold +0.50%
• Silver -1.76%%
• Uranium -2.67%
• DXY +0.71%

What moved commodities this week?

Gold & Silver

• GDX +0.04%
• GDXJ +0.36%
  
• SIL -0.53%
• SILJ +0.81%

Both gold and silver were slammed on Friday, despite posting good gains the day prior to the jobs report. Gold closed the week pretty much flat, and silver closed the week down.

It’s funny how price-action explainers will quote silver’s industrial applications when silver falls on bad economic news, and they would quote its safe-haven applications when it falls on good economic news.

If gold is an inflation hedge, how can it be down in the face of the mutli-decade highs that we’re seeing in inflation? Lobo Tiggre says that gold isn’t down, based on this chart:

Lobo also reminds me that gold is a leading inflation indicator, and not a following one. Meaning, gold doesn’t go up during inflationary periods, it goes up before inflationary periods. This is the reason why gold went up in 2020, and proved Lobo’s point.

Based on that knowledge and the chart above, Lobo told me that “there is nothing alarming about gold’s short-term performance”.

He also reminded me to “keep the big picture in mind” when looking at gold and its place in ones portfolio. Gold bullion is not a specualtion, it’s insurance.

To add to that, Lobo is happy with the price performance of gold because even in the face of a “strong” US dollar, and the increasing chances for a heavier rate hike in the fall, gold still managed to close the week slightly higher.

Copper

Even though the jobs report on Friday sent copper futures prices 2% higher, that wasn’t enough to help the metal that shares a color with my hair close the week in the green.

Until the worries about a recession come down, industrial metals remain high risk, according to Lobo. He’s still not buying copper nor copper stocks.

Earlier this week, Brian Gitt Tweeted this chart, saying that

“To meet energy transition targets using wind, solar, & electric vehicles requires mining more copper than the entire world used over the last 120 years. There’s not enough existing or planned mining capacity to supply the copper.”

Both Lobo and I remain bullish on copper but have only risked money on it, that we do not anticipating to need in the next five years.

Uranium

• URNM -1.85%
• URA -1.16%
• U.UN -2.67%

Uranium had a particularly good week on the side of news for the future of the sector, while the prices of the uranium equities declined. This is what Rick Rule would call an opportunity, and so did Justin Huhn, during this week’s interview.

An important development that I caught wind of this week was a screenshot shared by Harry Chris on Twitter.

“I’m confident that more than 100M lbs in U3O8 long-term contracts will be signed this year, the first year with this type of volume since 2012. The long-term contracting cycle is HERE.”

Uranium Insider said on Twitter

Economic Calendar for Next Week

Below, you will find an overview of economic news and data expected next week. I only watch the ones that I deem important for my gold-silver-copper-uranium-focused portfolio. Did I miss something? Please do let me know.

Next week is mostly about inflation. EU & US inflation data will be published throughout the week.

Monday, 08/08

• Not much

Tuesday, 09/08

• Brazil CPI
  • Previous: 11.89%
  • Forecast: 10.10%
    
    
• China CPI
  • Previous: 2.5%
  • Forecast: 2.4%
    
    
• China PPI
  • Previous: 6.1%
  • Forecast: 6%

Wednesday, 10/08

• Germany CPI
  • Previous: 7.5%
  • Forecast: 7.5%
    
    
• US CPI
  • Previous: 9.1%
  • Forecast: 8.7%
    
    
• Russia CPI
  • Previous: 15.9%
  • Forecast: 15.3%

Thursday, 11/08

• US PPI
  • Previous: 11.3%
  • Forecast: 10.4%
    
    
• US Jobless claim
  • Previous: 260K
  • Forecast: 263K

Friday, 05/08

• UK GDP Q2
  • Previous: 8.7%
  • Forecast: 2.8%

Warning

Antonio Atanasov is not an investment advisor. Antonio Atanasov owns shares of companies mentioned in this publication. Some of the companies mentioned in this video and/or publication are paying customers of Resource Talks. More specifically, Core Assets and FireFox are paying customers. The information provided in this publication – and all other publications by Resource Talks – is impersonal in nature and meant for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple licensed, experienced, and qualified investment advisors. Get numerous opinions before taking your own decision in the end. The minimum risk on any investment mentioned in this publication is 100% loss of capital.

Shortly: you will lose all of your money and possibly most of your brain cells if you listen to talking heads on the internet. Especially if they have orange hair and no experience (me).

Readers are cautioned that this presentation likely contains forward-looking statements about expected future events and the financial and operating performance of any companies potentially discussed herein. Reality often varies from people’s expectations. Managements like over-promising and under-delivering. If a manager was speaking in here, beware. Readers are encouraged to read the Cautionary Note on Forward-Looking Information and to consult the Company’s Annual Information Form, which is available on www.sedar.com. Reading the full disclaimer on the disclaimer page on this website is mandatory.

Timestamps

00:00 Important warning
00:10 Intro
03:10 Lobo Tiggre on jobs report, gold & silver
27:10 Why I still like copper long term
33:00 Uranium Insider on uranium contracting cycle
01:05:00 Next week’s economic calendar

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