Canada’s main equities benchmark outperformed its U.S. counterpart in the first half of 2025 as gains in gold and silver stocks amid persistent trade tensions and a fragile global economic outlook bolstered safe havens.
Data compiled by Investors King shows the S&P/TSX Composite Index advanced 8.6% year-to-date through June 30, surpassing the S&P 500’s 5.5% increase during the same period. When converted to U.S. dollars, the Toronto index delivered a 15% return, highlighting strong investor demand for gold-heavy portfolios.
“The market’s strength is clearly linked to the flight to gold,” said Sadiq Adatia, Chief Investment Officer at BMO Asset Management Inc. “You need to have things that can bulletproof your portfolio, and gold is the one that does that the best.”
Gold and silver producers accounted for roughly half of the TSX’s gains through mid-June. Heightened geopolitical tensions, driven by prolonged tariff disputes and conflicts in the Middle East, pushed investors toward safe-haven assets.
According to Bank of Nova Scotia analyst Simon Fitzgerald-Carrier, the surge in precious metals stocks reflects investor caution over U.S. tariff impacts on global growth.
Top performers included Agnico Eagle Mines Ltd., Wheaton Precious Metals Corp., and Lundin Gold Inc., the latter of which recorded a nearly 135% increase in share value in the first half alone.
Despite the strong run, there are questions over whether the rally will maintain its pace in the second half of the year. Spot gold prices dipped at the end of June as some geopolitical and trade risks began to ease.
“I don’t think gold is going to have the same run in the second half that it had in the first half because a lot of the ambiguity and the uncertainty that we were facing earlier on has subsided,” Adatia added.
Fundamentals remain mixed. Revenue forecasts for TSX-listed firms have declined notably since April, partly due to the index’s sizeable exposure to Canada’s struggling energy sector, according to a report by Bloomberg Intelligence strategist Gillian Wolff.
Still, some analysts see continued upside. Lesley Marks, Chief Investment Officer of Equities at Mackenzie Investments, said international capital flows into the TSX remain steady due to its strong weighting in materials, energy and financials.
Marks noted that Canada’s new Prime Minister, Mark Carney, has introduced policies aimed at stimulating investment and economic growth.
“There is a fundamental story around Canadian stocks because of policy changes from our government, but also a valuation story,” Marks said. The TSX trades at a price-to-earnings multiple of 17 times, well below the S&P 500’s 24 times, suggesting Canadian equities may remain attractive relative to their U.S. peers.
The outlook for the remainder of the year hinges on whether commodity prices hold and global macroeconomic conditions stabilize. For now, Toronto’s gold-focused equities have provided investors with an effective hedge against uncertainty — a factor that could keep the TSX ahead if market volatility persists.
