Commodities are Ripping Higher- Here's my Top Way to Cash in / Commodities / Uranium
Commoditiesare on fire.
Theprice of oil has soared 43% since the start of the year.
Palladium—ametal most often used in catalytic converters—has increased 28% over the sameperiod, while wheat has spiked 39%...
Theseare major moves. But I see commodity prices headed even higher this year.
Specifically,a huge opportunity is setting up in one of the most overlooked corners of thecommodity market.
I’llshow you how to position yourself for this in a minute. But first, let’s lookat why commodity stocks have been on such a tear lately.
TheRussia-Ukraine war has lit a fire undercommodity prices…
Yousee, Russia is the world’s second-biggest producer of oil, and thesecond-biggest producer of natural gas.
It’sthe world’s sixth-biggest coal producer. And it ranks third in potash andnickel production.
Theproblem is that Russia has effectively cut itself off from the global economyby invading Ukraine.
Countriesall around the world have hit Russia with a tidal wave of economic sanctions…
Andtwo weeks ago, the US announced it will no longer buy Russian oil.
Thisis a huge deal. When you take Russia out of the picture, there’s a lot lessoil, natural gas, coal, and wheat to go around. In other words, we’re lookingat a global supply crunch for many crucial commodities.
Itaccounts for 13% of the world’s corn production, and 8% of the planet’s wheat.And it’s the largest producer of sunflower oil.
WithRussia and Ukraine effectively out of the picture, the global commodity supplychain shrank overnight.
That’swhy we’ve seen such explosive price hikes across the commodity market.
Unfortunately,these massive shifts will take months, if not years, to correct.
Thismakes energy, metals, and agricultural stocks good bets right now.
Uraniumstocks have been out of favor for years.
Butthat’s about to change…
Asyou can see, uranium stocks are waking up in a major way. This chart shows theperformance of the Global X Uranium ETF (URA), which invests in abasket of uranium stocks. It’s rallied 37% over the past year. That’s more thandouble the S&P 500’s return over the same period.
Source:StockCharts
I see uranium stocks headed much higher in the comingmonths.
Yousee, the US power industry gets roughly half of its uranium from Russia and itsallies, Kazakhstan and Uzbekistan. This model is no longer sustainable in lightof what’s happening between Russia and Ukraine.
Twoweeks ago, Republican senators introduced a bill to ban Russian uraniumimports. It was also reported yesterday that Russia is considering banninguranium exports to the US.
Atthis stage, it’s practically certain that domestic uranium production willbecome a major political issue in the coming years, likely much sooner. USpoliticians will likely view domestic uranium production as a way to achieve“energy independence.”
This is a recipe for much higher uranium prices…
That’sclearly good for shares of uranium miners.
And Iexpect the coming bull market in uranium stocks to blow away what we’ve seenfrom other commodities recently.
Tounderstand why, look at this chart. It compares the market values of publiclytraded uranium stocks with oil and gas stocks. You can see the uranium marketis a tiny fraction of the oil market…
Inother words, it won’t take much money to send uranium stocks soaring.
Butdon’t just take my word for it…
Duringthe last uranium boom, Cameco (CCJ)—the largest publicly tradeduranium company—saw its stock price go from $1.70 in 2002 to $56 in 2007.That’s a +3,200% rise in just seven years!
Smalleruranium stocks like Paladin Energy handed out even bigger returns.
Ofcourse, volatility cuts both ways with uranium stocks. So, I don’t suggestspeculating on small uranium stocks without doing your research. And as always,never bet more money than you can afford to lose.
However,URA is a great, one-click way to cash in during a uranium bull market.
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