I’m writing this while fueled on caffeine after my Toronto Blue Jays lost an 18-inning heartbreaker in game 3 of the World Series. By the time you read this, the series will be over and I’m hopeful the World Series trophy stays north of the border. If not, it was an amazing season for my team, and I got to attend game 1 of the World Series with my sons – something I have dreamed of for many years.
The 92nd Element
A lot has been made of the performance of gold this year, with the physical metal up over 50% for the year, after delivering a return of over 40% in 2024. However, there has been another yellow metal that has recently outperformed; uranium. The chart below shows the performance of the Sprott Physical Uranium Trust (shaded chart) versus the Sprott Physical Gold Trust over the last 6 months. As the chart shows, uranium has outperformed gold over that period.
Energy Security
So, what is driving the price of uranium higher? As the world’s power demands increase, driven by factors including the re-onshoring of manufacturing and the rapidly increasing power thirst from data centers, nations are looking for secure sources of power. Traditional power sources such as oil and gas have proved to be less reliable with variable costs, while renewables such as solar and wind have been expensive to implement. Therefore, nuclear energy is a source of energy that governments around the world are keen to either re-examine or re-invest in.
Take a look at this headline and article from the news this week1:
Cameco shares soar after company and Brookfield sign $80-billion nuclear reactor deal with U.S.
CANDU Attitude
Ironically a week after an Ontario government anti-tariff TV commercial shown during the MLB playoffs, drove trade tensions between Canada and the U.S., two Canadian giants (Brookfield and Cameco) signed a deal to work alongside the U.S. government in developing up to $80 billion worth of new reactors across the country. As part of this deal, the U.S. government will receive up to 20% of an IPO allocation to Westinghouse (jointly owned by Cameco and Brookfield).
Canada developed expertise in the engineering behind nuclear reactors with the CANDU reactor, showcasing our engineering knowledge to the rest of the world.
These kinds of deals show hope that trade can operate across the borders, showing the U.S. that Canada is able and willing to be their trusted commodities supplier.
I’m just hopeful that by the time you read this, a key piece of U.S. metal is sitting safely in Canada!
- If you do not have a subscription to The Globe and Mail and would like a copy of the article, please contact Stephen Harvey – [email protected] ↩︎
