CANADA STOCKS-Gold stocks drive TSX higher as investors await Fed, BoC decision

By Avinash P

Dec 9 (Reuters) - Canada's main stock index advanced on Tuesday, with gold stocks leading gains, as investors awaited the highly anticipated central bank decisions from the U.S. Federal Reserve and the Bank of Canada.

Toronto's S&P/TSX Composite Index gained 0.5% at 31,330.26 points by 10:00 a.m. ET (1500 GMT).

The index has jumped more than 26% so far in 2025, and is on pace to outperform the major U.S. indexes, fueled by strong rallies in commodity and financial shares, with added support from an easing interest rate environment.

"The dominant factors in the Canadian market are resources and the big Canadian banks. They have been the driving force through this year and they will continue to be the driving force towards the end of the year," said Thomas Caldwell, chairman at Caldwell Securities.

All indexes were in the green, led by gold-mining shares up 1.4%, after the yellow metal's prices rose as markets positioned for a widely expected December rate cut from the Fed.

Perpetua Resources added 1.9%, while Harmony Gold and Orla Mining (ORLA) gained 3.8% and 1.5%, respectively. The index has more than doubled in value so far in 2025.

Utility stocks gained 0.8%, boosted by TransAlta (TAC) advancing 7%, after the power producer signed a long-term tolling agreement with Puget Sound Energy.

In other corporate news, defense company MDA Space (MDALF) advanced 4.7% after entering a strategic partnership agreement with the Canadian government and Telesat.

Brookfield Corporation (BN) announced the pricing of C$1 billion of medium-term notes, with shares rising 1%.

Traders widely expect the Fed to deliver a 25-basis-point rate cut when it concludes its meeting on Wednesday, while the Bank of Canada is expected to hold rates steady on the same day.

Recent domestic data has pointed toward a robust economy, with Friday's job figures showing the unemployment rate defying expectations and falling to a 16-month low in November. (Reporting by Avinash P in Bengaluru; Editing by Vijay Kishore)