Canada’s main stock index edged higher on Monday, with gold mining and materials shares leading the gains, as investors were optimistic following last week’s rally and the Bank of Canada’s willingness to support the domestic economy.
Toronto’s S&P/TSX composite index was up 0.2% at 29,821 points by 10:09 a.m. ET in choppy early trading after hitting an intraday high.
Data showed that raw materials prices fell 0.6% in August, while producer prices rose 0.5%, driven by higher prices of chemicals as well as meat, fish and poultry.
“One of the key factors continues to be the normalization of inflation and also interest rates, which we saw with the Wednesday 25-basis-point cut,” said Benjamin Jang, portfolio manager at Nicola Wealth Management.
“RMPI came out and it was expected to be down about a percent and it came down 60 basis points or so and I think that’s welcome.”
Gold mining and materials shares rose as the safe-haven asset hit a fresh record high, while silver rose to a 14-year peak.
Gold miners Aura Minerals Barrick Mining and Endeavour Mining added between 3.5% and 6.9%.
Silver miners Endeavour Silver and First Majestic Silver gained 8.2% and 7.5%, respectively.
Conversely, consumer staples were in the red, with specialty food products maker Premium Brands dropping 1.3%.
Among other stocks, planemaker Bombardier rose almost 4%, while other industrial stocks came under pressure.
The commodity-heavy index, which has benefitted from the rise in gold prices, is up 20.4% for the year, compared with the benchmark U.S. S&P 500’s 13.3% rise.
Domestic GDP data, due on Friday, will be in focus this week, with analysts expecting the Canadian economy to continue showing signs of weakness amid trade uncertainty.