Japan News Boosts Uranium, Powell Takes Hawkish Stance

Top Stories This Week: Japan News Boosts Uranium, Market Looks for Jackson Hole Cluesyoutu.be

Gold saw some upward momentum this week, moving from a low of about US$1,730 per ounce on Monday (August 22) to just over US$1,760 on Thursday (August 25). However, by the time of this writing on Friday (August 26) afternoon, the yellow metal was back down around US$1,737.

Market watchers are eyeing the annual Jackson Hole, Wyoming, economic symposium, which brings together central bankers from the US and other countries. Although it’s separate from the US Federal Reserve’s regularly scheduled meetings, comments made by officials at the event can provide insight on its direction.

Fed Chair Jerome Powell spoke on Friday, and prior to his remarks we asked our Twitter followers if they thought his tone would be hawkish or dovish. The 65 percent of respondents who voted for the former were proven correct — major indexes went tumbling as Powell indicated the central bank won’t let up in fighting inflation.

“Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy,” he said.

We’ll be asking another question on Twitter next week, so make sure to follow us @INN_Resource and follow me @Charlotte_McL to share your thoughts!

Japan’s nuclear news another positive uranium catalyst

Moving on from gold, let’s take a look at the uranium market.

The UEX (TSX:UEX,OTCQB:UEXCF) bidding war between Uranium Energy (NYSEAMERICAN:UEC) and Denison Mines (TSX:DML,NYSEAMERICAN:DNN) brought some excitement to the space earlier this month, and more recently the industry has seen other positive catalysts emerge on a global scale.

In focus this week was the news that Japan is not only looking to restart idled nuclear plants, but also wants to develop next-generation reactors. The news came from the country’s prime minister, who said a government “green transformation” panel will report back on ideas for these new reactors by the end of the year.

As a reminder, Japan took its reactors offline after an earthquake triggered 2011’s Fukushima nuclear disaster, and ramping back up has been a slow process that market participants have watched closely — Rick Rule of Rule Investment Media has said for years that he sees Japanese restarts as a crucial catalyst for the sector.

I heard from Justin Huhn of Uranium Insider shortly after the announcement, and he explained that Japan wants nuclear power to account for 20 to 22 percent of its grid by 2035, which would mean restarting an additional 20+ reactors. In the short term, it wants to restart at least seven more reactors by mid-2023.

“Depending on which reactors are restarted and those utilities, what sort of inventories they might still have in their own possession, we could actually see renewed demand from these restarts. And of course it also means it’s less likely that Japanese utilities will be selling pounds of inventory back into the market” — Justin Huhn, Uranium Insider

The market’s reaction has been very positive, and for Justin the news is a global message on the need for clean energy. We’ll be posting his interview next week, along with uranium commentary from Peter Grandich and John Ciampaglia, so keep an eye out for those conversations.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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