TSX Tech & Mining Rally: Seizing the Trade Truce Opportunity – Risks and Rewards Ahead

The U.S.-China trade truce, which slashed tariffs to 30% for U.S. imports from China and 10% for Chinese imports to the U.S., has sent shockwaves through global markets. For Canada's tech and mining sectors, this 90-day pause in the tariff war offers a critical window to capitalize on lower input costs, stabilized supply chains, and rising commodity demand. But as the saying goes, “don't let the rally blind you to the risks.” Here's how to navigate this volatile landscape.

The Rally: Why Tech and Mining Are Leading the Charge

The truce has reignited momentum in two of Canada's most vital sectors:

Tech Sector: Tariff Relief Fuels Growth

Lower tariffs on Chinese-made components—critical for semiconductors, consumer electronics, and AI hardware—have reduced production costs for Canadian tech firms. Companies like Zoomd Technologies (TSXV:ZOMD), which reported a 200% sales surge in Q1 2025, are benefiting from cheaper inputs while expanding into high-growth markets like AI-driven marketing platforms.

Gatekeeper Systems (TSXV:GSI), a leader in school bus safety tech, is another standout. With Transport Canada mandates driving demand, its AI-powered video analytics systems are now standard in Ontario and Nova Scotia—a trend that will only accelerate as infrastructure spending rises.

Mining Sector: Commodity Prices and Strategic Assets

The truce has stabilized global commodity markets, lifting prices for copper, gold, and rare earth minerals. Canadian miners with high-grade deposits and geopolitical buffer zones are prime plays:

• Euro Sun Mining (TSX:ESM) holds the Rovina Valley project in Romania, a politically stable region with 197,522 tons of copper and 1.84 million ounces of gold. With copper near $5.13/lb, this is a “buy the dip” opportunity.
• Rackla Metals (TSXV:RAK) is exploring Canada's Eastern Yukon, where high-grade gold samples hit 92 g/t—a sign of massive potential in the Tombstone Gold Belt.

Risks: The Truce Isn't a Permanent Fix

While the rally is real, the truce's 90-day lifespan means complacency is dangerous:

1. Non-Tariff Barriers Remain: China's export controls on rare earths (critical for tech manufacturing) and U.S. Section 232 investigations into Canadian steel/aluminum threaten supply chains.
2. Currency Volatility: The Canadian dollar's instability—amplified by gold's $3,500/ounce price—requires hedging.
3. Structural Trade Issues: Intellectual property disputes and forced tech transfers linger, while U.S. reshoring efforts (e.g., the CHIPS Act) could displace Canadian suppliers.

How to Play the Rally – Safely

The key is aggressive growth exposure paired with strategic hedging:

1. Leveraged ETFs for Short-Term Gains

The newly launched LongPoint 3x ETFs (e.g., QQQU for Nasdaq-100) offer explosive upside for traders willing to bet on the truce's momentum. However, keep positions short-term—these products are designed for day-to-day swings, not buy-and-hold.

2. Top Mining Stocks: Buy the Assets, Not the Hype

• Euro Sun (ESM): A 20-year mining license with renewal options ensures long-term stability.
• Artemis Gold (TSXV:ARTG): Its Blackwater mine in BC will hit commercial production in Q2 2025—don't miss the ramp-up phase.

3. Tech Plays with Scalable Moats

• Zoomd (ZOMD): Its AI-driven marketing platform has $18M in Q1 sales—a sign of product-market fit.
• Gatekeeper (GSI): Safety tech is a regulatory mandate, not a luxury. Its contracts are sticky and recurring.

4. Hedging: Gold and Inverse ETFs for Insurance

• Purpose Gold ETF (KILO): The lowest-cost hedged gold fund (0.23% MER) protects against USD/CAD swings.
• Inverse ETFs like SPYD (3x inverse S&P 500) can offset losses if trade tensions reignite.

Final Call: Act Now, but Stay Nimble

The U.S.-China truce is a “now or never” moment for Canadian investors. Tech's cost savings and mining's commodity tailwinds are real, but the clock is ticking. Pair aggressive bets on ESM, ZOMD, and GSI with gold-backed insurance via KILO.

The window to profit from this truce-driven rally won't stay open forever. The next 90 days could make or break your portfolio—pick your plays wisely.

DISCLAIMER: This analysis is for informational purposes only. Consult a financial advisor before making investment decisions. Risks include market volatility, geopolitical shifts, and sector-specific downturns.