Canadian Dollar Rises, TSX Lifted by Gold Gains
The price of gold helped boost the Toronto Stock Exchange’s main index, while U.S. markets were mixed Friday.
The S&P/TSX composite index rose 24.99 points to 15,052.52, lifted by the gold sector.
The February gold contract climbed $8.40 (U.S.) to $1,177.80 (U.S.) an ounce, ending the week down 60 cents from where it was a week ago.
John Stephenson, president and CEO of Stephenson & Company Capital Management, said investors turned to the precious metal as a safe haven ahead of Italy’s referendum.
Italians will vote in a referendum Sunday on a number of measures that would alter the country’s constitution. Italian Prime Minister Matteo Renzi has said he will resign if citizens vote against the plan.
“The risk is that Italy’s election sets up a whole series of destabilizing events,” Stephenson said.
Those in the “whole Armageddon school of logic” think a “no” vote and Renzi’s resignation could lead to a banking crisis in Europe and the eventual breakdown of the European Union, he said.
“That’s kind of the worst-case scenario that people are floating,” said Stephenson, adding he doesn’t see that version of events playing out — even if Renzi steps down.
That prospect of financial system instability is good news for gold, he said, as it’s considered a safe haven during uncertain times.
The price of oil, meanwhile, continued to ride the tailwinds of OPEC’s deal to cut crude production, announced earlier this week.
The January crude oil contract rose 62 cents to $51.68 (U.S.) per barrel, extending a series of gains that have taken benchmark oil prices to their highest levels since mid-October.
The commodity-sensitive loonie rose 0.19 of a U.S. cent to 75.28 cents US.
In New York, the Dow Jones industrial average slipped 21.51 points to 19,170.42.
The S&P 500 gained 0.87 of a point to 2,191.95, as the Nasdaq composite rose 4.54 points to 5,255.65.
The overarching concern that the rally following U.S. president elect Donald Trump’s election may have gone too far, as well as lacklustre performance from some big-name stocks in the technology sector have pushed U.S. markets down or kept them relatively flat, Stephenson said.
Elsewhere in commodities, the January natural gas contracts shed 6.9 cents at $3.44 (U.S.) per mmBtu and March copper contracts fell 1.8 cents at $2.63 (U.S.) a pound.
With files from The Associated Press