Our favourite precious metal made headlines today…gold has risen to a nine-month high of USD$688.64 in February.
We’ve often pointed out that investors hold gold as a hedge against a weakening dollar…and wouldn’t you know it, the dollar is close to a two-year low against the euro.
“The U.S. dollar continues to weaken and we are now looking for gold to break through USD$700 an ounce this year,” said John Meyer, an analyst at Numis Securities Ltd. in London.
There’s another metal on our radar that’s been seeing surging prices lately: uranium. Because of the possible global warming/fossil fuel connection, not to mention an increasing effort to find a viable alternative for oil and natural gas, the focus has naturally moved to this fuel used in nuclear power plants.
The team over at Casey Research sends us this note:
“Back in 1998, uranium was off most investor’s radar screens, and trading in the single digits. Now look at it. Today, uranium prices have exploded up to USD$113/lb, and appear that they will go even higher as growing global demand for nuclear power taxes an already tight supply of yellowcake.
Almost ten years ago there were less than 10 publicly traded companies exploring for uranium. Today – by many estimates – there are hundreds.
“Yet, while the future for uranium metal looks bright, the outlook for many of the stocks is less certain. To be blunt, most of today’s uranium issues are overhyped and overpriced, exposing investors to the ever-growing risk of a pullback in share prices.”
Markets and Money