CANADA STOCKS-TSX slips on escalating Middle East tensions; BoC keeps rates steady

(Updates prices and details throughout)

* TSX down 0.07%

* Miners drag as gold prices slip

* Bank of Canada holds rates

By Tharuniyaa Lakshmi

June 10 (Reuters) - Canada's main stock index fell on Wednesday after as renewed U.S.-Iran tensions cast doubts on prospects for a deal to end the war, while Bank of Canada kept interest rates unchanged as expected.

At 10:11 a.m. ET, the Toronto Stock Exchange's S&P/TSX composite index was down 0.07% at 34,386.29 points.

* U.S. President Donald Trump said on Wednesday Iran had taken too long to negotiate a deal and would now "have to pay the price," while Tehran said it would reassess diplomatic engagement with Washington after tit-for-tat strikes overnight.

* "This so-called ceasefire is not so 'ceasing', so that is dampening risk appetite. This sort of sabre-rattling in Iran is not helping," said Brian Madden, chief investment officer at First Avenue Investment Counsel.

* The materials group, which includes metal mining stocks, weighed the most on the index after gold prices fell around 2% as concerns about interest rate hikes resurfaced.

* The Bank of Canada on Wednesday left its key interest rate unchanged as widely expected and said it was seeing limited evidence that higher energy prices were fueling broad-based inflation.

* "The Bank of Canada's tone may matter more than the rate decision itself. By keeping both cuts and hikes in play the Bank is acknowledging that policymakers are operating with genuine uncertainty... one bad inflation print and they hike. One bad jobs report and they cut," said Michael Constantino, CEO of Webull Canada.

* Five of the 10 TSX sectors traded higher, with energy stocks helping limit losses, up 1.2%, as oil prices rose after President Trump scolded Iran in a Truth Social post.

* Meanwhile, economists have cited the upcoming review of the North American free trade agreement - the United States-Mexico-Canada Agreement - as the biggest uncertainty hanging over the Canadian economy.

* U.S. consumer prices increased 4.2% in the 12 months through May, the largest gain since April 2023, data showed, as the Middle East conflict raised the price of gasoline and other energy products.

* Among others, Thomson Reuters (TMSOF) fell 1.3% as the content and technology firm faces a shareholder vote at its annual meeting over its U.S. government contracts for services that some investors and employees say may help power the Trump administration's crackdown on undocumented immigrants. (Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Shailesh Kuber)