Gold Fever Lifts Canada’s Market Past S&P 500

Canada's stock market is having a moment—and it’s all thanks to gold.

In the first half of 2025, the S&P/TSX Composite Index surged 8.6%, outpacing the S&P 500’s 5.5% gain. When converted to U.S. dollars, Toronto’s benchmark actually climbed 15%, putting it on par with other gold-heavy global indexes.

What’s driving the outperformance? A full-blown rush into precious metals stocks. With investors spooked by tariff threats, geopolitical tensions, and Middle East conflicts, gold has become the go-to safe haven—and Canada’s miners have been riding that wave all the way up.

“You need things that can bulletproof your portfolio, and gold is the one that does that best,” said Sadiq Adatia, CIO at BMO Asset Management.

Through mid-June, gold and silver stocks accounted for half of the TSX’s gains, with firms like Agnico Eagle and Wheaton Precious Metals among the top performers. Lundin Gold led the pack with a nearly 135% gain.

But with gold prices cooling at the end of June, the question is whether the rally can last. Adatia doesn’t think so. Much of the ambiguity around trade and conflict is fading, and that could weaken demand for safe-haven metals.

Still, there’s more to the story. Analysts point out that Canadian equities are benefiting from global investors seeking exposure to sectors like materials, energy, and financials—all of which are heavily weighted in the TSX. On top of that, Prime Minister Mark Carney’s pro-growth policies are adding fuel to the rally.

And don’t forget valuation: the TSX is trading at a 17x price-to-earnings ratio, well below the S&P 500’s 24x, making it a relatively attractive buy for bargain hunters.

Bottom line: Gold’s rally may have lit the fuse, but Canada's stock market surge is being powered by more than just shiny metals. With smart sector exposure and political tailwinds, the TSX could keep shining—even if gold takes a breather.

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