Canadian market starts 2017 with triple-digit gain
January 3, 2017
TORONTO— Canada’s main stock market in Toronto kicked off 2017 with its first triple-digit gain in four weeks, as rising gold and silver prices contributed.
After finishing 2016 with a 17.51 percent gain, the Toronto Stock Exchange’s benchmark Standard & Poor’s/TSX Composite climbed 115.44 points, or 0.76 percent, to finish the first session of 2017 at 15,403.03 points. Eight of the ten sub-sectors started the year ahead.
Materials and Health Care groups saw the biggest gains, advancing 2.30 percent and 1.51 percent, respectively.
The Materials group, which is made up of producers of gold, precious metals, and raw materials saw sharp gains for a third time in four days to mirror changes in gold and silver prices. The spot price of an ounce of gold rose 0.64 percent to USD1,158.30, while the same weight of silver soared 2.46 percent to USD16.27.
As a result of the uplift in metal prices, six of the top ten most traded stocks by volume on the day belonged to the Materials group. Toronto-based gold miners Yamana Gold Inc., IAMGOLD Corporation, and B2Gold Corp. saw respective surges of 6.90 percent, 6.74 percent, and 6.27 percent.
Meanwhile, shares of Toronto-based Barrick Gold, the world’ s largest gold producer, rose 2.56 percent to 22.04 Canadian dollars (USD16.41).
The TSX Health Care group continued its latest rally, finishing ahead for a sixth straight session. Laval-based pharmaceutical firms Valeant Pharmaceuticals International Inc. and ProMetic Life Sciences rose 5.39 percent to 20.52 Canadian dollars (USD15.28) and 4.48 percent to 2.33 Canadian dollars (USD1.73). Dating back to Dec. 22, ProMetic shares have finished positive in each session and gained a combined 46.54 percent.
Other groups to finish in the positive on Monday were: Financials (0.83 percent), Energy (0.67 percent), Telecommunications (0.63 percent), Consumer Discretionary (0.50 percent), Industrials (0.25 percent), and Information Technology (0.18 percent).
The Financials group, which accounts for the largest weight in the index, rose as all of Canada’ s top-four banks saw increases in share price. No. 3 ranked Bank of Nova Scotia had the largest gain on the day of 1.34 percent to close at 75.76 Canadian dollars (USD56.40) a share. No. 2 Toronto-Dominion Bank followed with a 1.04 percent gain, while No. 1 ranked Royal Bank of Canada and No. 4 ranked Bank of Montreal rounded out the list with gains of 0.69 percent and 0.51 percent.
Meanwhile, Energy group finished up despite price of crude oil slipping. March futures for a barrel of Brent in London fell 1.89 percent to USD55.68 a barrel. Despite the drop, shares of Calgary-based Baytex Energy Corp. and Encana Corporation were among the top-ten most traded and both finished higher.
Baytex, which saw more than 7 million shares exchanged rose 3.05 percent to 6.76 Canadian dollars (USD5.03) a share. Meanwhile, Encana and its nearly five million shares traded moved up 1.90 percent to 16.06 Canadian dollars (USD11.96).
Industrials gained as Class B shares of Bombardier Inc. were the most actively traded on the day at 12.4 million shares. Stock price of the Montreal-based producer and planes and trains surged 5.56 percent to finish the day at 2.28 Canadian dollars (USD1.70).
Groups on the losing side on Tuesday were Utilities and Consumer Staples, retreating 0.73 percent and 0.32 percent, respectively.
The Canadian dollar inched down 0.0005 to begin the year at USD0.7444.
Gold Prices Outlook for 2017 and Beyond: Massive Gains Could Be Ahead
January 7th, 2017
Short-Term and Long-Term Outlook for Gold Prices
Gold prices had a rough second half of 2016. Now, as we have entered the new year, investors could be asking where the yellow precious metal is headed in 2017 and beyond.
You see, in the short term, there are a few factors that could send gold prices lower.
One of the biggest factors that could impact gold prices in the short term is the rhetoric that says gold isn’t worth owning when interest rates go higher. Since the U.S. Federal Reserve has just raised the rates, and it plans to raise them further in 2017, investors could get spooked and sell.
But, if its not the interest rates, the stock markets remaining close to their all-time highs might cause investors to take a little bit of a risk, and rush towards equities. Gold prices perform well when other asset classes are plummeting.
And maybe short-term price action could cause investors to run away from gold. Please look at the chart below and pay close attention to the circled areas.
The blue line on the chart above represents the 50-day moving average of gold prices. Since September 2016, this moving average has acted as a resistance level. Gold prices are approaching this moving average again and investors could look at this and sell the precious metal.
Regardless of all that’s going on in the gold market in the short term, investors keeping their focus long-term could reap massive rewards. Gold prices may be down in the short term, but not out.
As the precious metal prices remain suppressed, the underlying fundamentals are getting better.
Understand that, despite lower gold, we continue to see buyers. For instance, look at the sales of gold bullion at the United States Mint. In 2016, the mint sold 985,000 ounces of gold in American Eagle coins. (Source: “Bullion Sales,” United States Mint, last accessed January 6, 2017.)
You will not hear about it in the mainstream media, but this was the highest amount of gold sales at the U.S. Mint since 2011, the year when gold prices touched the $1,900.00/ounce level.
Mint sales may just represent investors buying gold…
Central banks are buying gold as well. They have been buying the precious metal since 2009, and there’s really no sign of them stopping anytime soon.
What’s Next For the Precious Metal in 2017 and Beyond?
Here’s what must be understood clearly: in 2016, gold prices actually increased for the first time since 2012. Between 2013 and 2015, a lot of trust was lost in gold.
With higher precious metal prices in 2016, we could see those who have been on sidelines come in and buy in 2017. This could give a decent boost to gold prices.
With this in mind, it could be a great idea for investors to start paying attention to mining companies. If gold prices increase, investors could see leveraged returns through them.
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