TSX Edges Lower as Energy and Metals Stocks Decline; BoC Seen on Hold
The TSX edged lower on Thursday as declines in energy and metals stocks weighed, while TD Securities expects the Bank of Canada to hold rates steady through year-end.
The Toronto Stock Exchange edged lower on Thursday, pressured by declines in energy and metals stocks, as TD Securities projected the Bank of Canada would hold interest rates steady through the end of the year.
The S&P/TSX Composite Index slipped as weakness in commodity-linked sectors outweighed gains elsewhere. Energy stocks fell alongside crude oil prices, while metals and mining shares declined on lower gold and copper prices. The move reflects ongoing uncertainty about global demand and central bank policy trajectories. For gold and precious metals traders, the TSX's decline underscores the sensitivity of mining equities to shifts in commodity prices and rate expectations. A steady BoC rate outlook may keep the Canadian dollar relatively stable, which can influence gold prices in CAD terms. Traders can monitor real-time gold quotes on NowPrice for the latest levels. Gold's broader backdrop remains supported by central bank buying, which has been robust since 2022 as institutions diversify reserves away from the US dollar. Real US 10-year yields, a key driver of gold's opportunity cost, have eased from recent highs, providing additional tailwinds. The COMEX-LBMA spread has narrowed, indicating reduced arbitrage pressure, while ETF flows into GLD and IAU have been mixed, with some inflows from investors seeking a hedge against geopolitical risks. Jewelry demand in key markets like India and China remains price-sensitive, but investment demand via bars and coins has held steady. The inverse correlation with the DXY dollar index remains intact, with a weaker dollar typically boosting gold prices.
Looking ahead, market participants will focus on upcoming Canadian inflation data and global central bank meetings for further direction. The BoC's next decision is scheduled for July, and any shift in its forward guidance could impact both the currency and commodity markets. Additionally, developments in US trade policy and China's economic stimulus efforts remain key factors for metals demand. Traders should watch for any divergence between the BoC and the Federal Reserve, which could affect the USD/CAD exchange rate and, by extension, gold prices in both currencies. The ongoing conflict in Ukraine and tensions in the Middle East continue to support safe-haven demand, while any signs of a slowdown in global economic growth could further bolster gold's appeal. With gold trading near key resistance levels, a breakout above $2,400 could attract fresh buying, while a failure to hold support near $2,300 may trigger profit-taking.