Uranium stocks, already trading at higher valuations than their national benchmark indexes, will rise further amid predictions the price of the fuel may surge as much as 30 percent, investors and analysts said.

Uranium prices, which last month climbed to the highest level in more than two years amid a pickup in demand from China, will rally as the global economic recovery spurs countries in Europe and Asia to increase purchases, they said.

Uranium spot prices rose 40 percent this year and 34 percent since the end of September to $62.50 a pound on Dec. 20, according to Roswell, Georgia-based Ux Consulting, which tracks the industry. Producers in Australia and Canada forecast demand for the metal will increase as countries, including India, expand their use of nuclear power to curb emissions from burning coal.

"Uranium spot prices have rallied strongly over the past few months on strong Chinese demand," said Tim Schroeders, who helps manage $1 billion in Melbourne at Pengana Capital Ltd. "With an improving global economy, it's not unreasonable to expect uranium demand to improve, to fuel increased economic activity."

Uranium rose to the highest price in more than two years last month after China Guangdong Nuclear Power Co. agreed to long-term supply contracts with the world's two largest producers, Denver-based pricing service TradeTech LLC said in a Nov. 26 report.

David Fuller's view Fullermoney follows this increasingly important energy sector closely and a 'Search' of the site under 'uranium' will produce 295 entries (use link fourth down, upper left), covering uranium shares, the metal, charts, analysis and reports. A 'Search under 'nuclear' will produce another 215 entries, with some overlap.

Could the price of uranium itself rise 30% next year as mentioned in opening paragraph above?

I imagine that most subscribers who have attended The Chart Seminar will look at this 10-year chart of uranium and say: "Why not", in answer to the question above. After all, it has formed another base formation and is now trending upwards once again.

Fundamentally, very little was actually going on in the uranium industry during the last big rally which peaked in June 2007. That was overwhelmingly a speculative move, partly inspired by the strength of crude oil prices. This time, it really is different because a number of new nuclear reactors are under construction and many more are planned for the next decade and beyond.

I maintain that 2003 to June 2007 for uranium was the dress rehearsal. I would not be surprised to see this new bull market move well beyond the previous high before another significant downturn occurs. Interestingly, several uranium mining companies led by Cameco were active buyers during the 2009-2010 basing phase, followed by China which began to stockpile yellow cake in the second quarter of this year. The speculators have returned more recently.

If I am right in believing that uranium will exceed its 2007 peak of $138 in the next few years during the current bull market, there is a good chance that the uptrend will be quite consistent once again. Without futures markets there is much less turnover and very little hedging. Instead, it is mostly one-way traffic on the way up in the bull trend, and also on the way down in a bear phase.

We are entering what I believe will be the first ever fundamentally driven global bull market for uranium. It would be a shame to miss it. Meanwhile, I would classify uranium shares as speculative investments because there is very little yield and valuations are high relative to more established and conventional investments.