Canada's generational wealth building opportunity amidst Trump tariff gloom

As we head towards spring, it is raining resource opportunity in Canada. This winter we have been making the case for Canadian mining stocks. In our February Top 40 Report Insiders bet on Canada's comparative advantage we wrote, "As Canada deals with the challenges presented by the Trump Administration, insiders are betting on Canadian resource stocks, particularly mining."

We followed up to get the message out to our community in this blog by posting the February Top 20 Mining & Crypto Report Bright days for Canadian mining investors. We suggested that Barrick Gold's (ABX) improving fortunes would help to draw the attention of institutional investors to the mining group as it represented a large cap opportunity. Earlier, in our February 20th morning report CEO bets Santacruz Silver Mining shares could sizzle, we noted that silver was outperforming gold in 2025. We suggested that if silver were to make new highs, silver miners could benefit. If you have not read the report, I have attached it below.

Trump tariffs may have put a floor under industrial metals for the foreseeable future. First, copper showed remarkable resilience this winter and today we see silver breaking out of its current range. The next resistance point could be the November highs just under US$35.00 per ounce. Silver also has the distinction of being a monetary metal. As such, a strong gold price could provide silver with some support should the copper rally run out of steam.

The improving fortunes of mining shares comes as global investors are confronted with the reality that America no longer has strangle hold on AI development. The arrival of China-developed DeepSeek this year was a game changer for global asset allocators who are overweight US big technology shares.

Meanwhile, the relative strength of silver and mining stocks could not come at a better time for the Canadian market as global investors now have to figure out where to redeploy capital as they reduce exposure to US technology. The appeal of Canadian mining stocks essentially boils down to offering investors an opportunity to make the best of a difficult economic environment characterized by global competition to secure the resources needed to fortify industrial capacity.

While we do not have a crystal ball, we have sense we are in the process of completing the setup phase of a multi-year mining stock rally. After this initial move higher, we would not be surprised to see a consolidation as the Fed stays on hold until events force its hand to cut rates or undertake QE. Additional Fed easing could usher in a potentially explosive rally of generational size. The next few months likely offer the chance to position for the Fed's resumption of an easy money policy. As always, we will be keeping an eye out to see if insiders are taking money off the table. So far, insiders on balance appear to be still on the buy side.

In my opinion, now is the time to double down on the Canadian resource opportunity.

Disclosure - one or more INK Research employees holds Santacruz Silver Mining.

Morning_INK_20Feb2025.pdf