Canadian Stocks Inch Higher Ahead Of Interest Rate

Index Update: Canadian stocks posted marginal gains on Tuesday as investors brace for interest rate and monetary policy announcements by the central banks of both Canada and the U.S. While investors predict a rate lowering in the U.S., rates are expected to remain unchanged in Canada. After opening a little lower than yesterday's close, the benchmark S&P/TSX Composite Index soon gained ground to trade positive throughout the rest of the session before settling at 31,244.37, up by 74.40 points (or 0.24%).

Macro Update:  Traders are awaiting the press conference with Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers following the interest rate announcement wherein more insights on the central bank's analysis of the national economy and its rate path for 2026 can be gathered. The central bank has delivered nine cuts over the past 17 months. In its most recent meeting on October 29, the BoC pruned the rate by 25 basis points to 2.25%.

Top Movers:  Among the individual stocks, Pan American Silver Corp (11.07%), Aya Gold and Silver Inc (7.47%), First Majestic Silver Corp (7.18%), Curaleaf Holdings Inc (6.21%), and Sprott Inc (2.97%) were the prominent gainers.

Our Stance:  Price action is currently consolidating near a critical support zone around 31,100. Sustaining levels above this zone is essential for preserving positive sentiment and the broader uptrend. However, a decisive move below 31,200 could hint at weakening momentum and open the door to a short-term pullback. In such a case, subsequent support levels at 31,000 and 30,800 may provide a cushion and help limit deeper downside risk.

Commodity Update:  The dollar held largely steady on Wednesday as traders awaited a pivotal Federal Reserve decision, with markets leaning toward a rate cut amid one of the most divisive meetings in years. Commodities saw mild gains: gold rose 0.18% to USD 4,244.45, silver climbed 1.26% to USD 61.59, and copper added 0.82% to USD 11,560.80. Brent crude inched up 0.20% to USD 62.05, though supply concerns and Russia-Ukraine peace talks limited upside. 

Technical Update:

The S&P/TSX Composite Index inched higher on Tuesday, gaining 74.40 points (+0.24%) to close at 31,244.37. The advance was backed by trading volumes, signaling firm investor confidence and reinforcing the prevailing bullish momentum. From a technical standpoint, the index maintains a robust upward structure, trading well above its 50-period Simple Moving Average (SMA), which continues to act as a key dynamic support. Momentum indicators remain favorable, with the RSI holding at 59.38 a level that reflects steady buying interest without nearing overbought conditions. Price action is currently consolidating near a critical support zone around 31,100. Sustaining levels above this zone is essential for preserving positive sentiment and the broader uptrend. However, a decisive move below 31,200 could hint at weakening momentum and open the door to a short-term pullback. In such a case, subsequent support levels at 31,000 and 30,800 may provide a cushion and help limit deeper downside risk.