Gold Surge Lifts TSX 300+ Points After Weak U.S. Jobs Data

Canada's main stock index climbed 308.17 points to 35,274.84 on Friday, with basic materials stocks leading the charge. The sector, which houses mining companies, got its lift from a sharp gold rally. The August gold contract jumped US$61.60 to US$4,187.30 an ounce.

The catalyst was Thursday's U.S. employment report. Employers added 57,000 jobs in June, well short of the 100,000 economists expected and a slowdown from May's pace. "The weaker jobs number takes pressure off inflation," said Allan Small, senior investment adviser at iA Private Wealth. "That reduces the urgency for the Fed to raise rates." Gold, which thrives when rate-hike expectations fade, took the cue.

The energy sector also gained ground, though oil's move was modest. The August crude contract rose nine cents to US$68.78 a barrel. The real story is supply risk. Iran's joint military command warned Thursday that tankers passing through the Strait of Hormuz must use its approved routes or face a "forceful response." Small said talks between the U.S. and Iran appear stalled as Iran prepares for the funeral of its Supreme Leader, killed in the war. "They're charging tolls, the U.S. says that's not true," he added. The Strait carries about a fifth of the world's oil, so any disruption there feeds directly into crude prices.

The Canadian dollar slipped to 70.42 cents U.S. from 70.52 cents on Thursday, a minor move against the broader commodity rally.

Small said the next test for markets will be the next inflation print. If price pressures stay muted, the Fed's rate path stays flat, which keeps the wind at gold's back. That same dynamic would also support the broader TSX, given the index's heavy weighting in materials and energy. For now, the jobs data gave traders a clear sector readthrough: weaker labor market, higher gold, and a watchful eye on the Strait of Hormuz.