Tariff Troubles and Gold
Contributed Opinion

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Are You Prepared?

Gold has been in corrective mode since October 21, when it double-topped at about $4380, and investors are asking. . . 

What are the drivers of this pullback? Well, from a technical standpoint, oscillators were overbought, and sentiment was a bit frothy.

The big catalyst was sudden concern about the prospect of more rate cuts from the Fed. The "good news" for gold bugs is that job growth appears to have turned negative, and that makes a December cut more likely than it was just days ago.

Also, the U.S. Supreme Court ruling on Trump's tariffs is upcoming. If the court kills the tariffs, there could be a huge stock market rally . . . initially. 

If Trump folds on his tariffs from that point, money managers will begin to focus on the government's horrific debt situation again. It's been papered over since Musk left DOGE, and there has been hope that the tariff revenues could help with the debt.

A renewed focus on the debt would be very positive for gold.

On the other hand, if Trump pushes ahead with new tariffs to make up for the cancelled ones, this could create more uncertainty, and of course, uncertainty is good for gold!

Here's a look at a key daily chart for this fantastic monetary metal: 

Stochastics is finally overbought and close to a buy signal, after experiencing one of its longest overbought situations ever. $3900 is becoming support, and a big rally appears imminent.

Here's a look at the weekly chart, which is stunning: 

It's possible (and arguably probable) that this current correction is going to create a huge bull flag that targets the $6500 area for gold. That was my original long-term target for gold.

It's a target I've since revised to $15,0000-$20,000 due to the global loss of confidence in all fiat money.

What about the miners? Well, here's an interesting chart of the important GDXJ ETF: 

Bullish Stochastics is doing battle with a pesky H&S top pattern. 

Elliott Wave analysis would suggest this has been a minor five-wave decline, and a significant rally probably would have started today if the U.S. jobs report had been released.

The bottom line: The computer age created millions of jobs, and AI may destroy them even faster than they were created!

It's a time to begin averaging into GDXJ and SGDJ, and into their component stocks.

Sentiment? Here's a nice sentiment chart, the BPGDM: 

It's bouncing off the 50 line, where momentum-oriented rallies often begin.

CDNX-listed junior stocks are the darling of many Western gold bugs. Finding gold is a difficult task, and when the going gets tough, the tough must get going!

One exciting explorer that is ignoring the pullback in the CDNX is Searchlight Resources Inc. (SCLT:TSXV; SCLTF:OTCQB). Here's a snapshot of this Saskatchewan-focused high-risk and high-potential-reward junior stock: 

Here's an enticing chart:

The key to investor success in a correction is to keep the mood "peppy." A huge saucer bottom is in play for Searchlight, and a blast into resistance at 25 cents seems highly likely to be the next order of business for this stock.

To sum up the overall market, there could be a bit more corrective price action for the miners over the next six to eight weeks, but now is the time to average into those of interest and get ready for "multi-bagger" fun in the year 2026!

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