Gold and uranium prices have been at odds lately, with the former facing downward pressure as the latter maintains its bullish run. The two precious metals have had a complex relationship ever since investors began taking an interest in these volatile elements.
Gold, being the world’s most popular and widely traded metal, is often seen as a safe-haven asset for investors. As such, it serves as a hedge against inflation and economic uncertainty. The yellow metal is also seen as a hedge against currency devaluation, as it is priced in US Dollars.
Uranium, on the other hand, is a highly volatile and unstable element. Although it has seen increased demand from nuclear power plants, its supply chain is subject to numerous uncertainties. Additionally, its highly volatile price action has caused many investors to steer clear of the commodity.
Since October 2020, gold prices have been facing downward pressure, as investors have turned their attention to higher-risk and higher-return assets. Meanwhile, uranium prices are searing through the roof, due to a surge in investment from cities in Central Washington who are using uranium-based nuclear power plants.
This trend presents a conundrum for gold investors who may be optimistic about gold’s future. While gold typically does well when currencies depreciate, uranium is now stealing the long-term limelight. Looking at historical trends can help investors make informed decisions on which metal to invest in, as both have their own set of risks and rewards.
Regardless of which metal one is more comfortable investing in, it is prudent for investors to keep a close eye on gold and uranium prices. It may be worth taking a closer look at uranium as its bull run continues, although gold still remains a safer bet with its strong track record of returns in times of economic uncertainty.