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Price spike prompts up-tick in hedge fund uranium activity

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A newly buoyant uranium market has prompted an increase in related trading activity by investment banks Goldman Sachs and Macquarie Group, as well as several hedge fund firms looking to benefit from a spike in the price of the nuclear fuel, according to a report by Bloomberg.

The report cites unnamed industry and hedge fund sources with knowledge of the deals as revealing that both banks have upped their trading in physical uranium, while Goldman has also increased its trading in options.

A few hedge funds are also reportedly stepping up their trades in both physical uranium and options on the back of a shortfall in supplies that has boosted prices to the highest level seen in 16 years.

Goldman Sachs has now started writing options on physical uranium for hedge funds, the first time it has created a derivative for the metal, which has doubled in price over the past year to $102 a pound. The increase has been driven by major producers struggling to keep pace with demand from countries turning to nuclear energy as they look to cut their carbon emissions.

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