TSX: Gold a bright spot article

Jimmy · 2025-09-20T08:53:48-0400

John Zechner was on BNN market call lately discussing the high concentration % gold miners in the TSX index now which is kind of concerning.

“In Canada, gold has been the huge mover, and I think if you break apart the index, gold is now at 12 per cent of our index, and that has been the huge winner,” said John Zechner, chairman and founder of J. Zechner Associates. “That to me is the single most important reason why Canada has played such catch-up and has actually done better than the S&P 500, certainly this year so far.”

Dennis da Silva, senior portfolio manager at Middlefield, agreed that the gold sector is “the largest contributor” in driving the TSX higher. “If you look at the S&P/TSX global gold index, that’s up 40 per cent year-to-date. So if you tie that into the TSX, I would say about 30 per cent of the index’s return is driven by gold and silver names or precious metals in general,” he said in an interview last week.

Chris McHaney said there are a few factors that influence the price of gold – government deficits around the world, inflation concerns and trade uncertainty tend to be positive ones – but it can be difficult to assess which is driving price moves at a given time. Central banks around the world were also buying more of the key commodity as another source of reserve currency, da Silva said. He noted this trend became more common after the U.S. and European Union froze Russian assets after it invaded Ukraine.

The problem is some of these factors at some stage will start to unwind, the trade issues and inflation are already starting to be settled. Gold isnt going to keep rising 30%/yr and when it does roll over it is going to drag the TSX down w it. It may be better to adjust portfolio weights or own low volatility index ETFs w lower material exposure in light of this.

Gold is a bright spot for TSX, helps index outperform the S&P 500 - The Globe and Mail

currentsea · 2025-09-20T09:20:17-0400

So when do you think gold will level off?

Jimmy · 2025-09-20T09:36:07-0400

Good question. Could be awhile as a lot of the uncertainty is due to the Ukraine war which shows no signs of letting up. Inflation is falling though. Maybe a mutli year horizon.
I knew banks and resource companies were large components of the TSX, was just shocked at the high % related to mineral stocks making the index even more volatile.

hfp75 · 2025-09-21T11:15:31-0400

Hate to say it, but the TSX/TSX60/Ect is such a small market, the index is not really well diversified. You can hunt around all you want on here or www sites but I was convinced this narrow scope of investing really wasn't healthy. For a few years now been using a Canadian 5-Pack. Yes the general theme is a 6-pack but I removed REITs as I feel my house is enough exposure to the RE market and I also feel that Canadian RE is over valued and household debt is way to high. Instead of buying a REIT I decided to put that $ into my mortgage, now I am mortgage free and have no regrets at all. REITs would have a role if you have no house (RE exposure).

In summary I am more than happy with my 5-Pack and the 4+% dividend.
RBC
Fortis
CN Rail
Enbridge
Telus

Steady-Eddies..... I thus (in Canada) do not own miners or a corporate mineral exposure, I do however have 20% in bullion. This way poor corporate decisions don't hurt me but I am subject to many other variables with bullion & proxies.

Jimmy · 2025-09-22T09:50:17-0400

I am diversified in many sectors too. The worry about the TSX and our $ was they were petrocurrencies. Now it seems an equal worry is they are largely tied to the price of gold. It is just concerning that when gold eventually rolls over, it will drag down the market with it.

Materials stocks in comparison in the S&P only make up 2% of the index.

hfp75 · 2025-09-22T15:53:32-0400

I don’t see global problems going away…..

Large govt debts, central bank balance sheets are huge, natural disasters, war, over population=inflation pressures, the decline of globalism=inflation pressures, people migration, erosion of a living wage, people born in first world countries are pretty lazy & all on drugs…

nope…. Gold will continue to do well.

Faramir · 2025-09-23T16:35:29-0400

Yes, HOPING for a bit of a pullback in gold here.....I mean short medium term

TSX: Gold a bright spot article

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