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  • Uranium ETF Highly Vulnerable To The Ebbs And Flows In The Market 0 comments
    Aug 22, 2013 2:05 AM

    Since the fund's inception in 2010, there has never been such a loss in its value. The Fukushima disaster in March 2011 has played a very powerful negative effect on the commodity. The radioactive space has seen a change in its demand trend, simply predicting torrid waters for this equity fund belonging to the uranium industry.

    The most devastating earthquake to hit the Japanese economy resulted in a loss of a quarter trillion dollars for the total economy. More so the funding of the commodity in the mining stages has also lost its positive approach. The disaster in Fukushima has brought a sudden slow down of the growth of the emerging new markets of uranium or rather has put a big question forward towards the future of this product.

    But, it is appallingly true that there is a demand for this product which is focused on the necessary requirements for the economies relying on it for their energy demand. From where do you expect the demand to be satisfied? Most of the economies of the world are so much entwined in the question of where to suffice their needs for the demand for power and energy. So this commodity still stands strong in the energy sector and is recently priced at $50/lb, which depicts its worthiness. In fact the actual negative effect of the whole scenario could be the fact that uranium miners might have to close down due to the present hunch in the market for the commodity and this would lead to the increase in the gap between the demand and supply of the product. From where would the demand for this product be gratified?

    Well, uranium mining industry is vulnerable due to its small cap personality and number of producers of the commodity, a further drop in the price might lead to a panicky situation.

    But the silver lining behind the uranium cloud is that, there are a large number of investors sitting in the energy market willing to bank on the low rates of the commoditiy. By banking on the rates what is meant is , that they find it all the more fruitful to invest on the product as they see it to be the right time to buy a very potential , diverse fund which is grossly anticipated to pull up its socks in the near future to come.

    A collective conceptualization of the developed nations for the fruitless fulfillment of the demands to their energy requirements is an important factor to be kept in mind while focusing on the portfolio that is to be invested on to. Daring investors can bank on these investments belonging to the uranium industry.

    There is a rumor in town of a near set up of 130 nuclear reactors, by China, India and Russia. This will lead to a swollen demand rate for the product and an enlargement of the demand for the portfolio. This inclination would help provide an intravenous injection into the veins of the uranium industry. China is anticipated to have an increase in its nuclear power bid by a difference of 28.46 million kilowatts by 2015. A whopping amount of energy demand and supply ratio, only facilitating a bonus growth in the mining industry. The UAE and other nations such as France, Romania, South Korea, Bangladesh, and Turkey are expected to also increase their preference of focusing on the nuclear industry. So there is a very big hype of a good growth in the nuclear industry.

    A 7grams pallet of uranium can produce the same strength of energy as 341 kilograms of natural gas or 803 kilos of coal and approximately 500 kilos of oil, so we can see that this energy trapped substance holds an incredible amount of weight age and energy which is also hidden in its financial vehicles.

    Global X Uranium ETF [URA] tries to deliver in uranium Invest tandem with the Solactive Global Uranium Index. Uranium ETF operates with an annual management fee of 0.69%.

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