Uranium Rises for Second Week on Speculation about ETF Buying

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"We are still strong believers that the spot price will double from its lows over the next two to three years..."

Uranium rose 6%, advancing for a second straight week, on speculation about possible buying of the nuclear fuel by an exchange-traded fund.

Uranium-oxide concentrate for immediate delivery climbed $2.50 to $44 a pound, Denver-based pricing service TradeTech LLC said in a report on April 24. Prices gained in the prior week for the first time in almost six months.

"Short-term bullish momentum may come from one of the uranium ETFs possibly raising money to buy uranium in the spot market over the next three to six months," Max Layton, an analyst at Macquarie Group Ltd. in London, said by telephone.

"We are still strong believers that the spot price will double from its lows over the next two to three years as the market moves into deficit on strong Chinese demand growth," Macquarie said in a report. The bank predicted a "return of investors" as prices increase.

Uranium climbed to a record $138 a pound in June 2007 as commodity prices advanced. By the middle of this month, the metal's price had slumped to a 2009 low of $40.50 a pound as investors covered losses in other markets and the global economic slump sparked concern about energy demand.

China aims to have 100,000 megawatts of nuclear capacity by 2030, up from about 9,000 megawatts now, Gu Zhongmao, a deputy chief at the China Institute of Atomic Energy, said on April 22.

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