The Paladin Energy Ltd (ASX: PDN) share price has been booming double digits almost every other day since late August thanks to skyrocketing uranium prices.
However, its shares are unwinding on Monday, down 13.59% to 89 cents at the time of writing.
What’s driving the Paladin Energy share price?
Broader market selloff
Wall Street was red across the board last Friday, with the Dow Jones Industrial Average, Nasdaq and S&P 500 down between 0.48% and 0.91%.
The S&P/ASX 200 Index (ASX: XJO) has followed suit, down 1.2% to a 2-month low of 7,314.90.
The S&P/ASX Materials (INDEXASX: XMJ) is currently down 2.78%, which doesn’t spell good news for the Paladin Energy share price.
Uranium cools off
The uranium sector has been running hot since late August after spot prices jumped from US$30/lb to 9-year highs of around US$50/lb.
Even after today’s selloff, the Paladin Energy share price is up more than 100% since 20 August.
Coinciding with the market’s broader weakness on Friday night, the Global X Uranium ETF (NYSE: URA) tumbled 7.83%.
The uranium ETF provides a good reflection of how the sector is performing, given its broad exposure to uranium mining and nuclear components.
Are uranium prices still booming?
Uranium prices managed to close around US$50/lb on Friday.
The recent jump in uranium has largely been driven by Sprott Inc’s Physical Uranium Trust. The fund has been aggressively buying physical uranium off the spot market, tightening the market and driving prices higher.
The fund continued snapping up uranium last Friday, according to its Twitter account.
Overall, it looks like uranium prices have held steady which spells good news for the broader uranium sector.
However, it looks like the crumbling ASX 200 and resources sector might have other plans for the Paladin Energy share price.