TSX Marks Historic High on Precious Metals Rally

Index Update:  The S&P/TSX Composite Index rose 0.58% to close at a fresh all-time high of 32,407.02 on Tuesday, extending gains from the prior session. Strength in commodities, particularly precious metals, more than offset weakness in the energy sector.

Macro Update:  Geopolitical Tensions Support Metals: Investor appetite for gold increased following reports of media crackdowns in Venezuela after Delcy Rodríguez’s swearing-in and the recent US capture of Nicolás Maduro. Markets viewed the developments as supportive for defensive assets rather than a broad risk-off shock. nergy Stocks Lag on Venezuela Supply Risk: Energy producers underperformed as prospects of renewed Venezuelan crude shipments to the US weighed on sentiment. The potential return of Venezuelan oil raised concerns around market share pressure for Canadian oil exporters.  Services Sector Still Under Strain: Canada’s S&P Global Services PMI improved to 46.5 in December but stayed in contraction. Weak demand, falling new orders, and continued job cuts highlighted ongoing pressure in the services economy.  Private Sector Activity Remains Soft: The Composite PMI rose to 46.7, signaling a second straight month of contraction. Services continued to drag overall activity despite modest stabilization in manufacturing.

Top Movers and losers:  Top movers include First Majestic Silver Corp. (TSX: AG) up 10.1%, Endeavour Silver Corp. (TSX: EDR) up by 8.4%, and Perpetua Resources Corp (TSX: PPTA) up by 6.5%. Top Losers include Bombardier Inc (TSX: BBDb) down by 4.3%, Enerflex Ltd. (TSX: EFX) down by 4.1% and Baytex Energy Corp (TSX: BTE) dropped 3.4%.

Our Stance:  Technically, the index continues to exhibit a constructive upward structure, trading comfortably above its 50-period Simple Moving Average (SMA), which remains a key dynamic support and has consistently underpinned the ongoing uptrend. Momentum conditions remain favorable, with the 14-period Relative Strength Index (RSI) at 58.96, indicating steady buying interest without entering overbought territory.

Commodity Update:  The U.S. dollar traded in a narrow range on Wednesday as investors awaited a batch of key U.S. economic data likely to shape the Federal Reserve’s rate outlook, overshadowing geopolitical concerns. Commodities softened, with gold slipping 0.24% to USD 4,486.10, silver down 0.56% to USD 80.54, and copper easing 0.36%. Brent crude declined 1% to USD 60.11 after comments on potential Venezuelan oil supply boosted supply expectations.

Technical Update:  The S&P/TSX Composite Index advanced on Tuesday, gaining 187.07 points (+0.58%) to close at 32,407.02. The move was accompanied by strong trading volumes, underscoring robust investor participation and reinforcing the prevailing bullish momentum. Technically, the index continues to exhibit a constructive upward structure, trading comfortably above its 50-period Simple Moving Average (SMA), which remains a key dynamic support and has consistently underpinned the ongoing uptrend. Momentum conditions remain favorable, with the 14-period Relative Strength Index (RSI) at 58.96, indicating steady buying interest without entering overbought territory. Price action is currently consolidating near a critical support zone around 32,300. Sustained holding above this level will be crucial for maintaining positive sentiment and preserving the broader bullish bias. However, a decisive break below 32,300 could signal a loss of near-term momentum and potentially trigger a short-term corrective phase. In such a scenario, the 32,100 and 32,000 levels may act as initial downside buffers.