Cause for Concern With the Uranium ETF

After a multi-year run of disappointing investors, the Global X Uranium ETF (NYSEArca: URA), which tracks uranium miners, started rebounding in significant fashion in the fourth quarter. That ebullience has carried into 2017 with the uranium exchange traded fund higher by more than 23%.

However, investors still need to approach URA with some caution. For example, URA has pulled big in a big way after touching a 52-week high. From that high above $19, URA now resides closer to $16, a decline that took just a few weeks to materialize.

Adding to the recent pressure on URA is that uranium prices continue tumbling. As is the case with other mining equities stocks and ETFs, rare are the occasions when these investments rise while the material they mine loses value.

“Don’t be swayed by the arguments of future nuclear reactors in China, India, etc. Instead focus on the here and now. The uranium futures chart is telling you the truth, not the so-called experts marketing their investment newsletters. When the price of uranium turns decidedly positive, then and only then is it time to start investing in uranium companies,” according to a Seeking Alpha analysis of URA and uranium.