Canadian stocks edged higher on Thursday

Index Update:  Canadian stocks edged higher on Thursday as gains in gold jacked up mining stocks which pushed the index higher while traders assessed the economic outlook and the Bank of Canada's decision yesterday to keep rates unchanged. After opening just a little lower than yesterday's close, the benchmark S&P/TSX Composite Index soon gained momentum to trade firmly positive throughout the rest of the session before settling at 31,660.73, up by 169.88 points (or 0.54%). Notably, this is a new record high for the index. 

Macro Update:  Yesterday, the U.S. Federal Reserve instituted a quarter-point rate cut, bringing rates down to the 3.50% to 3.75% range. The Fed's projections hinted that one rate cut will take place next year although new data could change this. The bankers wish to see how the three rate cuts implemented this year work their way through the economy. The rate cut pressured the U.S. dollar downwards. Front month Comex gold for December delivery climbed sharply by $89.10 (or 2.12%) to $4,285.50 per troy ounce. Recent data indicated that the Canadian economy posted a 2.6% annualized jump in the third quarter, while the unemployment rate dropped 0.4% points to 6.5% in November. Hence yesterday as expected, the Bank of Canada decided to hold its target for the overnight rate at 2.25%, with the Bank Rate at 2.50% and the Deposit Rate at 2.20%. Data released by Statistics Canada today revealed that Canada's trade balance swung to a surplus of C$0.15 billion in September from a C$6.3 billion deficit in August, much higher than expectations for a C$4.5 billion deficit. While exports rose 6.3% month-on-month to C$64.2 billion in September, imports of goods and services edged up 0.6% to $342.1 billion.

Top Movers:  Among the individual stocks, Terravest Capital Inc (22.33%). Perpetua Resources Corp (13.52%), New Gold Inc (9.09%), First Majestic Silver Corp (6.93%), Bombardier Inc (4.19%), and Bank of Montreal (1.76%) were the prominent gainers.

Our Stance:  Price action is consolidating near a critical support zone around 31,600. Holding above this area will be essential to maintaining positive sentiment and keeping the broader uptrend intact. However, a decisive breakdown below 31,600 could indicate waning momentum and open the door for a short-term corrective move. Should this occur, the next support levels at 31,400 and 31,300 may help limit deeper downside risk.

Commodity Update:  The U.S. dollar is heading for its third consecutive weekly decline, pressured by expectations of rate cuts next year after the Federal Reserve pushed back against hawkish market bets, boosting the euro and sterling to their highest levels since October. Gold fell 0.20% to USD 4,304.25, silver dropped 0.88% to USD 63.98, and copper slipped 0.26% to USD 11,840.75. Brent crude rose 0.50% to USD 61.61 amid potential U.S. action on Venezuelan oil tankers.

Technical Update:

The S&P/TSX Composite Index climbed on Thursday, gaining 169.88 points (+0.54%) to finish at 31,660.73. The advance was supported by strong trading volumes, underscoring firm investor confidence and reinforcing the prevailing bullish momentum. From a technical perspective, the index continues to exhibit a constructive upward structure, trading comfortably above its 50-period Simple Moving Average (SMA)—a key dynamic support that has consistently underpinned the trend. Momentum conditions remain healthy as well, with the RSI at 65.07, reflecting steady buying interest without yet signaling overbought conditions. Price action is consolidating near a critical support zone around 31,600. Holding above this area will be essential to maintaining positive sentiment and keeping the broader uptrend intact. However, a decisive breakdown below 31,600 could indicate waning momentum and open the door for a short-term corrective move. Should this occur, the next support levels at 31,400 and 31,300 may help limit deeper downside risk.