The Prospector News

Jordan Roy-Byrne – “Gold Stocks Remain in Downtrend but Uranium Stocks on the Cusp of New Bull Market”

You have opened a direct link to the current edition PDF

Open PDF Close
Uncategorized

Share this news article

Jordan Roy-Byrne – “Gold Stocks Remain in Downtrend but Uranium Stocks on the Cusp of New Bull Market”

 

 

 

 

 

Gold stocks failed to breakout in the spring and then brokedown to multi-year lows by September. As autumn beckons, the precious metals sector at large is very oversold and could be starting a rebound. However, the fundamentals are not yet in place for a new bull market. They will be when the Fed moves to the end of this rate hike cycle. Although gold stocks and most commodity stocks are mired in downtrends, that isn’t the case for uranium stocks which appear to be on the cusp of a new bull market.

 

 

 

According to Trade Tech, the spot price of uranium is $26.70/lb which is a two and a half year high. The price has begun to rise after basing for several years.

 

 

 

In recent months, the announcement of production cuts from the world’s largest uranium producers (Kazatomprom and Cameco) along with the Section 232 investigation into uranium imports has contributed to the recent price rise in both the commodity and the shares.

 

 

 

Below we plot a capitalization-weighted uranium stock basket which consists of 11 junior uranium companies.

 

 

 

The basket, which closed yesterday near 95 is trading above all of the major moving averages but needs to close above 98 to make a new 52-week high. A weekly close above 115 would mark a major breakout and put the index at a 4-year high.

 

 

 

 

 

At the top of the chart we plot the uranium index against GDXJ. It’s uranium juniors against gold juniors and uranium is winning. The ratio closed last week at more than a two and a half year high.

 

 

 

Turning to the gold stocks, we see a rebound could be underway. The gold stocks have been extremely oversold and last week started to rebound as they approached very strong support levels. Potential upside targets are GDX $20-$20.50 and GDXJ $30-$30.50.

 

 

 

 

 

The gold stocks are setup for a rally but one should not confuse a relief rally with a new bull market. The fundamentals are not in place for such. At least not yet. As for uranium, the fundamentals appear to be favorable and recent price action could put the sector in position for a big winter and 2019. To profit from a new uranium bull and prepare for an epic buying opportunity in junior gold and silver stocks in 2019, consider learning more about our premium service. 

 

 

Posted September 21, 2018

Share this news article

MORE or "UNCATEGORIZED"


First Phosphate and Lithium Australia Sign MOU for Joint Development of an LFP / LFMP Pilot and Commercial Plant

First Phosphate Corp. (CSE: PHOS) (OTC: FRSPF) (FSE: KD0) is plea... READ MORE

December 6, 2023

New Found Intercepts 43 g/t Au Over 11.6m at Keats West

New Found Gold Corp.  (TSX-V: NFG) (NYSE-A: NFGC) is pleased to ... READ MORE

December 6, 2023

Northisle Makes New Discovery of Near Surface Copper-Gold Porphyry With Multiple Intercepts at West Goodspeed

Highlights: Drilling at the new West Goodspeed target has inter... READ MORE

December 6, 2023

Rob McEwen Increasing Ownership In Goliath Resources Limited To 5% And Crescat Capital To Maintain Its 18.4% Ownership

Goliath Resources Limited (TSX-V: GOT) (OTCQB: GOTRF) (FSE: B4IF)... READ MORE

December 6, 2023

enCore Energy Enters US$70 Million Transaction with Boss Energy; Proceeds to Accelerate Company-Wide Uranium Production Plans

enCore Energy Corp. (NYSE American: EU) (TSXV: EU) is pleased to... READ MORE

December 6, 2023

Copyright 2023 The Prospector News