All eyes were on the US Federal Open Market Committee this week, which shed some light on policy after its two day meeting, held from Tuesday (July 27) to Wednesday (July 28).
“Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
The path of the economy continues to depend on the course of the virus. Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain” — US Federal Reserve
The Fed indicated that it will leave interest rates unchanged, and will also continue its bond-buying program, although the central bank has now suggested it will start thinking about how to taper.
The reaction from gold was positive, with the yellow metal taking off after the meeting — it spent time above the US$1,830 per ounce mark on Thursday (July 29), although it was back down around US$1,813 at the time of this writing on Friday (July 30) afternoon.
Aside from that, I had the chance to speak this week with veteran investor and speculator Rick Rule. He of course shared his thoughts on gold, but perhaps more importantly gave an update on uranium.
I hadn’t spoken with Rick about uranium since the beginning of 2020, when he told investors not to enter the market unless they could be patient. And patience has indeed been needed in the uranium sector — when asked what’s holding the market back, Rick pointed to Japanese restarts, the same factor he identified in our conversation a year and a half ago. In his opinion, “Everything else is in place.”
Rick remains bullish on uranium for a number of reasons, including the launch of the Sprott Physical Uranium Trust (TSX:U.UN), which he believes will help deal with excess supply. However, he did caution that the juniors have gotten ahead of themselves and are no longer the bargain they once were.
“I think the juniors are substantially ahead of themselves. This doesn’t mean that they don’t have upside when the price of uranium crests through US$50 or US$60 (per pound), which I suspect it will. I’m just suggesting that among the juniors there’s downside as well as upside now” — Rick Rule, investor and speculator
For that reason, he suggested looking at producers, saying his favorites are Kazatomprom (LSE:KAP), China General Nuclear (SZSE:003816) and Cameco (TSX:CCO,NYSE:CCJ).
The link to the full interview is here, and you won’t want to miss it if you’re interested in Rick’s latest thoughts on gold, uranium and the overall resource sector.
With uranium in mind, we asked our Twitter followers this week if they think uranium juniors or producers provide the most opportunity right now. Respondents were somewhat divided, but by the time the poll closed most of them had given their vote to the juniors.
Finally, in the psychedelics space INN’s Bryan Mc Govern heard from James Halifax of the Psychedelic Investor. James shared his takeaways from the first half of 2021, admitting that there’s been volatility and saying that clinical trial results will be important to watch for.
“If (the trials) come back negative, basically all these companies are going to $0. The entire valuation on them right now is based on the idea these (trials) will be successful” — James Halifax, the Psychedelic Investor
Most psychedelics companies are following in the footsteps of the pharmaceutical industry, where clinical trials are key to advancement. James noted that company valuations are quite high right now due to positive expectations, but so far it’s too soon to tell whether these levels are merited.
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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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