Certain commodities are getting hot again. Now trading around $910, gold has proven to be relatively resilient and may reach $1000 in a few weeks. But gold isn’t alone; copper is rising too. Copper fell 50% from last summer’s highs, but since December it has trended upward despite stock market volatility. Copper and gold have the wind at their backs in this market.

Another commodity has caught investors’ attention in recent days: uranium. Yes, that perennially despised substance with a back story in catastrophe, espionage, protests, and nuclear fallout. But this sometimes-sordid history may prove too weak an objection for the outstanding potential in uranium. The substance may hold enough promise to fuel transportation, lighting, and cell phones for generations.

The cost/benefit analysis is changing. Chernobyl was 23 years ago. Three Mile Island was 30 years ago. Since then, scientists have made giant strides toward safe nuclear energy. Times have changed with carbon emissions hearings and coal mining accidents. US nuclear submarines have been running for 60 years without a fatal nuclear accident. The newest nuclear reactors are pollution-free. Even Dr. Patrick Moore, founder of Greenpeace is on the side of nuclear power. Nuclear energy is now clean.

The favorable economics of nuclear power is another reason for optimism. There are 44 reactors under construction, 110 more in the planning stages, and another 272 proposed. Denison Mines CEO Peter Farmer sees uranium taking another bounce from the mid $40s to $60-70 an ounce. According to Farmer, 170 million pounds of uranium demand will overwhelm 125 million pounds of supply. If that happens, the few companies investing in this commodity would benefit tremendously.

We know one such company that should gain from a spike in gold, uranium, and copper. Vancouver-based Fronteer Development Group Inc. (FRG) is looking to capitalize in the mining sector. A large portfolio of gold, copper, and uranium projects in Nevada, Canada, and now Turkey has propelled FRG to a $300 million market capitalization. It’s not a huge company in the sector, but it is significant. They’re sitting on $175 million in cash or cash equivalents. Fronteer’s fundamentals are strong.

Like most companies, FRG fell as the market collapsed. Once a $14 stock, FRG declined to penny stock range. However, unlike the market, its low was in November. Since then, it has been building a base of support. FRG is currently in a trading range in a short-term uptrend.

We think there’s room for FRG to move to $4 and beyond because of underlying activity in the commodities market. If gold and copper continue to move upward and uranium rises from demand in the energy market, FRG could very well be a home run. To gain in a rising commodities market, go with mining darling FRG.

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