Why the S&P/TSX’s 33,650 Breakout Could Flip Your Portfolio – Gold’s Hidden Power Play

• TSX crossed 33,650, setting up a 1.7% weekly gain – the best week since January.
• Gold reclaimed $5,000/oz, lifting Agnico Eagle, Barrick and Pan American Silver.
• Mining earnings beat expectations, while energy stocks slipped on falling oil prices.
• Financials showed resilience despite mixed US macro data.
• Technical charts hint at a possible breakout, but volatility remains high.

You missed the gold surge, and your portfolio feels the pain.

S&P/TSX Composite Breaks 33,650 – What It Means for Investors

The Canadian benchmark rallied roughly 0.2% on Friday, closing above the 33,650 level for the first time this year. That modest gain nudged the index toward a 1.7% weekly rise, its strongest performance since the start of the year. While the move looks modest on the surface, it signals a shift in market sentiment: safe‑haven assets are re‑entering the mix, and investors are rewarding sectors that benefit from a weaker US dollar and heightened geopolitical risk.

Gold Prices Reclaim $5,000 – The Safe‑Haven Engine Behind the TSX

Gold surged past the psychologically important $5,000 per ounce mark, driven by escalating US‑Iran tensions that reignited safe‑haven demand. The metal’s rally added roughly 0.2% to the broader index, but its real impact was on the mining constituency:

• Agnico Eagle Mines (+0.8%)
• Barrick Gold (+0.5%)
• Pan American Silver (+2%+)

For context, a 1% move in gold typically translates to a 0.3% to 0.5% swing in the TSX’s mining weight, given that mining comprises about 13% of the index. The current price action is reminiscent of the 2022 gold rally that propelled Canadian mining stocks to multi‑year highs.

Mining Sector Momentum – Earnings Beats and Share Price Rallies

Lundin Mining exploded 4.5% after posting earnings that beat consensus forecasts on both top‑line revenue and adjusted EBITDA. The surprise stemmed from higher copper and zinc prices, coupled with operational efficiencies in Chile and Brazil. Meanwhile, Fairfax Financial surged 2.6% on strong underwriting results and a refreshed capital allocation plan.

Historically, a mining earnings beat often precedes a sustained sector rally lasting 4‑6 weeks, especially when commodity prices are on an upward trajectory. Investors should note that the sector’s price‑to‑earnings (P/E) ratio remains below the 12‑month average, suggesting upside potential if earnings momentum persists.

Energy Sector Pullback – Oil Price Corrections Temper the Gains

Energy giants Suncor Energy and Imperial Oil both retreated as crude oil prices eased after a 9 million‑barrel draw in US inventories. The dip erased much of the weekly gains that had buoyed the sector earlier in the month. While oil remains above $80 per barrel, the recent correction underscores the sector’s vulnerability to inventory data and OPEC+ production decisions.

From a valuation standpoint, the Canadian energy index now trades at a forward‑looking price‑to‑cash‑flow (P/FCF) multiple of 7.2x, a discount to the historical 8.5x average, indicating a possible buying opportunity for contrarian investors.

Macro Backdrop – US GDP Softness Meets Sticky Core PCE Inflation

The US macro environment presented mixed signals: a softer‑than‑expected GDP print raised concerns about growth, yet core PCE inflation remained stubbornly high, keeping the Federal Reserve on a hawkish path. This divergence fuels demand for assets that hedge against inflation—gold being the prime candidate.

Canadian banks TD Bank and CIBC each ticked up 0.4%, reflecting confidence in domestic credit conditions despite the US slowdown. The banking sector’s net interest margin (NIM) compression is modest, and the capital adequacy ratios remain well above regulatory minima.

Technical Outlook – Chart Patterns Suggest a Potential Breakout

On the daily chart, the TSX sits above its 50‑day moving average (33,420) and is testing the 200‑day moving average (33,150). A close above 33,700 would likely trigger a bullish flag pattern, projecting the next target near 34,300 based on the flag‑pole’s height. Conversely, a break below 33,200 could open a short‑term corrective channel, dragging the index toward the 32,800 support zone.

Volume has been rising steadily over the past week, a classic confirmation that the rally is driven by genuine buying pressure rather than a short‑term speculative spike.

Investor Playbook – Bull vs. Bear Cases for the TSX

Bull Case: Continued gold strength pushes mining stocks higher; a soft US economy keeps the Canadian dollar weak, further boosting export‑oriented sectors. Energy rebounds if OPEC+ tightens supply, and financials benefit from a stable credit environment. Target price for the TSX: 34,500 (+3.2%).

Bear Case: De‑escalation of geopolitical risk drags gold back below $5,000; oil prices fall deeper into the $70 range; and a stronger US dollar erodes the competitiveness of Canadian exporters. Technical breakdown below the 33,200 support could trigger a 2‑month correction toward 32,600. Target price for the TSX: 32,800 (‑2.5%).

For most investors, a balanced approach—tilting toward mining and financials while maintaining a modest hedge in energy—offers the best risk‑adjusted return profile in the current environment.