Energy crises are one of the big storylines so far this year, which is why investors should stand up to attention when an energy commodity ETF like the Sprott Uranium Miners ETF (URNM) surpasses its 200-day Simple Moving Average as it did over the last three business days.
URNM closed at $70.07 on Tuesday according to YCharts, above its $69.94 200-Day Simple Moving Average. Having initially breached $70 this past Friday, its new price could signal to investors that now could be a great time to dive into the radioactive fuel source. Uranium has received interest so far this year thanks to its lack of emissions and its reliability for electricity generation in countries like France.
So long as Russia’s war in Ukraine continues – and it may yet worsen – Europe and much of the world will be looking to other energy sources, and uranium can play a big role. The U.S. itself is looking to develop its own uranium supplies to fuel reactors, yet one more trend driving momentum for uranium and URNM.
In terms of long-term prospects, miners are looking for key signals themselves that demand for uranium will reach a tipping point building off of restrictions on Russian-sourced uranium, for example. This winter and the next, which may be worse for energy costs, will be key as to whether governments decide to re-up on their interest in uranium.
URNM’s three days above the 200-day SMA is its longest stretch above the average since September, as well, as a stat reflected in its performance. URNM rode its uptrend at the start of the Fall to a 3.2% three-month return, which has since grown even further to a 6.1% return over one month. URNM has also brought in $3.5 million in one-month flows as well as $1.7 million in one-month net inflows.
URNM can also boast the largest direct exposure to physical uranium among the most notable uranium ETFs, which at the cost of 85 basis points may make it an appealing offering for investors who trust in the 200-day SMA signal. Tracking the North Shore Global Uranium Mining Index, which is reconstituted and rebalanced each quarter, URNM is certainly one to watch this month in the energy commodity ETF space.
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