CANADA STOCKS-TSX slips as gold falls, oil prices settle at pre-Iran war levels
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July 6 (Reuters) - Canada's resource-heavy benchmark stock index fell on Monday, pressured by a drop in gold and crude oil prices, while investors assessed domestic and U.S. economic data to gauge the Federal Reserve's monetary policy path.
The Toronto Stock Exchange's S&P/TSX Composite index .GSPTSE fell 0.18% to 35,212.32 points.
The materials .GSPTTMT and global gold .SPTTGD indexes fell 2.2% and 1.7%, respectively, as bullion prices retreated GOL/. Stocks of Canadian miners I-80 Gold IAU.TO fell 7%, while those of Eldorado Gold ELD.TO and Endeavour Silver EDR.TO were down 2.7% and 3.5%.
Canada's energy index .SPTTEN dipped 1.2%, tracking a fall in crude prices LCOc1, CLc1 earlier in the day, after OPEC+ agreed to further raise output targets from August even as exports through the Strait of Hormuz continued to recover, increasing prospects of elevated global supplies. O/R
"With inflation being high, a little bit of market volatility, and with a lot of geopolitical conflict, you would say that sets up for a pretty good market for gold, and that just hasn't been the case so far," said Josh Sheluk, CIO and portfolio manager at Verecan Capital Management.
"And all of a sudden, we're talking about a potential glut (in the oil market). It just goes to show how unpredictable, especially commodity markets, are over short-term timeframes," Sheluk said.
An S&P Global survey showed that Canada's services economy contracted in June as geopolitical uncertainty and elevated prices hurt demand. However, the recent slide in crude prices has raised expectations of the economy returning to growth.
Last week, the S&P/TSX Composite index hovered near a record high, supported by easing tensions in the Middle East and fading Fed rate-hike expectations following a soft U.S. labor market report.
Traders are currently pricing in just one U.S. rate hike by the end of this year, according to LSEG data, while the Bank of Canada is expected to keep interest rates steady this year, with its next policy decision due on July 15.