TSX Rises on Mixed Data; Gold Rebounds as Building Permits Miss

The Toronto Stock Exchange closed sharply higher on Thursday, as investors assessed mixed economic data. The S&P/TSX Composite Index advanced, driven by gains in several sectors, while gold rebounded from earlier weakness, recovering from intraday lows near $2,650 per ounce. The rebound in gold prices reflects a shift in risk sentiment and expectations around monetary policy, with traders closely watching the real US 10-year yield, which has an inverse correlation with gold. When real yields decline, gold becomes more attractive as a non-yielding asset. Additionally, central bank gold buying has remained robust since 2022, with institutions like the People's Bank of China and the Reserve Bank of India adding to their reserves, providing a floor under prices. The COMEX-LBMA spread has narrowed, indicating reduced arbitrage opportunities and more orderly market conditions.

Building permit data came in weaker than expected, raising concerns about the pace of economic recovery. However, other economic indicators showed resilience, leading to a mixed picture. Weaker building permits could signal slower economic growth, which may prompt central banks to maintain accommodative policies, supporting gold as a hedge. The DXY index, which measures the US dollar against a basket of currencies, has been volatile; a weaker dollar typically supports gold prices due to the inverse relationship. ETF flows into GLD and IAU have been mixed, with some investors adding to positions amid geopolitical uncertainty, while others take profits. Jewelry demand, particularly in India and China, remains price-sensitive, but investment demand from ETFs and central banks continues to underpin the market. Traders can track these moves on NowPrice's live gold dashboard to stay updated on real-time price action.

Looking ahead, market participants will focus on upcoming inflation data and central bank commentary for further direction. The TSX's performance will also be influenced by commodity prices and global economic trends. Investors should monitor key support and resistance levels for gold as the market digests the mixed signals. A break above $2,700 could trigger further upside, while a drop below $2,600 may test the 200-day moving average. The interplay between real yields, the dollar, and central bank policies will remain critical in determining gold's trajectory in the near term.