FX.co ★ TSX Declines, Still Poised for Weekly Gains

On Friday, the S&P/TSX Composite Index dipped by approximately 0.2%, settling below the 26,730 level, thereby slightly retracting the week's gains to about 0.8%. This movement occurred amidst declining gold prices, economic stagnation, and evolving policy expectations affecting Canadian stocks. Leading the downturn were significant mining stocks, including Agnico Eagle, Wheaton Precious, Barrick Gold, and Franco-Nevada, which plummeted between 2% and 3.7%. This drop mirrored a sharp decrease in gold prices, which have hit a four-week low as demand for safe-haven assets diminishes due to diminishing geopolitical tensions and clearer insight into the US-China trade agreement. Simultaneously, Canada's economy shrank by 0.1% in both April and May, heightening fears of a broader economic slowdown, particularly as the manufacturing and wholesale sectors contracted under tariff pressures. Nonetheless, persistent core inflation and the Bank of Canada's cautious approach to cutting rates have led to higher long-term bond yields, consequently increasing discount rates and exerting pressure on stock valuations.