Uranium prices continued their uptrend as concerns about supply remained. As a result, the Global X Uranium ETF (URA) surged to a high of $31.50, its highest point since January 2013, making it one of the top performers this year. It has risen by more than 400% from its lowest point in 2020.
URA inflows are risingThe Global X Uranium ETF is one of the biggest funds in the energy industry with over $2.7 billion in assets. Recently, more investors have continued to allocate capital in the fund as demand rose.
Data by ETF.com shows that the fund has had inflows in the past five straight months. In all, it has added over $370 million in assets. This trend has helped the fund surge to its highest level in more than a decade.
URA is an ETF that gives investors access to some of the biggest uranium mining companies globally. Some of its biggest constituent companies are Cameco, Nexgen Energy, Uranium Energy Corp, and Paladin Energy. It has also invested in Sprott Physical, a fund that holds real uranium assets.
Most companies in the URA ETF are from Canada followed by Australia, United States, South Korea, and the UK. In most cases, the fund is often seen as a good indirect way of investing in uranium.
Uranium prices have been in a strong uptrend in the past few months as demand for uranium power rises. In Europe, countries like Germany and France have decided to extend the life of their uranium power after Russia invaded Ukraine.
Similarly, in the US, Biden has increased investments in uranium, which he believes will help the country move to net zero by 2050. In a statement last week, a key head in the Energy Department said:
“Boosting our domestic uranium supply won’t just advance President Biden’s historic climate agenda, but also increase America’s energy security, create good-paying union jobs, and strengthen our economic competitiveness.”
At the same time, there are concerns about uranium supplies. In a statement last week, Kazatomprom, the biggest uranium company in the world, said that its production will be much lower than expected. It attributed this slowdown to a sharp decline of sulphuric acid, a crucial element in its mining.
URA ETF stock analysis
Turning to the long-term monthly chart, we see that the URA ETF has been in a strong uptrend for a long time. Most recently, the fund rose above the key resistance at $27.85, the highest point in November 2021. It has also rallied above the 23.6% Fibonacci Retracement level, a positive sign.
Therefore, there is a likelihood that the stock will continue soaring in the coming months as traders target the 38.2% retracement point at $40.62. This target price is about 28.73% above the current level and is in line with my last URA forecast.
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