TSX Futures Gain on Gold Rebound

The S&P/TSX Composite Index rose nearly 1% to trade close to 36,000 on Thursday as gold prices jumped, lending support to mining stocks. Gold rebounded as the recent rally in oil prices lost steam, limiting the surge in bond yields. The moves followed reports that Saudi Arabia aims to restore around half of its East-West pipeline capacity within days and return it to full operation within six weeks. Agnico Eagle, Barrick and WPM rising about 2%. The pause in the oil rally also supported credit-sensitive stocks, as easing inflationary pressures helped lower bond yields. Major banks traded above the flatline, with CIBC and National Bank up around 0.5%. Meanwhile, the US Federal Reserve raised interest rates, while FOMC members projected in their Summary of Economic Projections that another rate hike could be warranted this year. Fed Chair Kevin Warsh said inflation remains elevated, while data released last week showed that core US inflation rose more than anticipated in August.

Futures tracking the TSX rose on Thursday as gold prices jumped, lending support to mining stocks. Gold rebounded as the recent rally in oil prices lost steam, easing inflationary pressures. The moves followed reports that Saudi Arabia aims to restore around half of its East-West pipeline capacity within days and return it to full operation within six weeks. The pause in the oil rally also supported credit-sensitive stocks, as easing inflationary pressures helped lower bond yields. Meanwhile, the US Federal Reserve raised interest rates and FOMC members projected another rate hike could be warranted this year in their SEP. Fed Chair Kevin Warsh said inflation remains elevated, while data released last week showed that core US inflation rose more than anticipated in August.

The TSX shed 0.3% to close at 35,491 on Wednesday following the US Fed’s widely expected decision to raise its benchmark rate by 25 bps to a 3.75%-4% range. Major banks were mostly lower, with RBC down 0.5%. Gold prices fell following the FOMC decision. Miners also traded mostly lower, with WPM erasing earlier gains to fall 1.9%, while Franco-Nevada shed 1.1%. Energy stocks weighed on the index as oil prices retreated, with Canadian Natural down 3.3% and Suncor off 3.6%. Elsewhere, European Commission President von der Leyen said the EU is opening the door for Canada to become its first “associate member,” with cooperation across manufacturing, AI, critical minerals and energy. The move comes amid an escalation in the US-Canada trade war after talks collapsed last month.