TSX Crashes as Gold Rout Sparks Global Market Shock
Canada’s main stock market has just taken a sharp and unsettling hit and the shockwaves are being felt far beyond Toronto. The Toronto Stock Exchange plunged by more than a thousand points in a single session, one of its steepest drops in recent memory, as a sudden and aggressive sell-off in precious metals rattled investors.
At the heart of this move is gold. For months, gold had been surging, acting as a safe haven during political uncertainty, inflation fears and questions about central bank independence. But that trade flipped fast. Gold prices dropped hundreds of dollars an ounce in a matter of hours, dragging silver and other metals down with it. Because the TSX is heavily weighted toward mining and materials companies, the impact was immediate and severe.
So what triggered this reversal? The catalyst came from Washington. U.S. President Donald Trump announced Kevin Warsh as his pick to lead the Federal Reserve when Jerome Powell’s term ends. Warsh is widely viewed as more hawkish on inflation and markets interpreted his nomination as a signal that interest rates could stay higher for longer. That expectation strengthened the U.S. dollar and when the dollar rises, gold often falls, because it becomes more expensive for global buyers.
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For investors who had piled into gold as protection against uncertainty, this was the moment to rush for the exits. Major Canadian mining stocks fell sharply, wiping out months of gains in a single day. What had been the TSX’s biggest source of strength over the past year suddenly became its biggest weakness.
This matters because it highlights just how sensitive global markets remain to monetary policy signals. A single announcement about the future direction of the U.S. Federal Reserve was enough to reprice assets worldwide. It also raises fresh questions about volatility ahead. If gold continues to retreat, markets like Canada’s, with large exposure to commodities, could face more pressure.
At the same time, the sell-off shows how quickly sentiment can change. Gold is still far higher than it was a year ago and central banks around the world continue to buy it as a long-term hedge. But days like this are a reminder that even so-called safe assets can move violently when expectations shift.
U.S. markets also ended lower and currencies moved sharply, with the Canadian dollar slipping against the greenback. Investors are now watching closely to see whether this was a one-day shock, or the start of a broader reset across global markets.
We’ll continue tracking how this develops and what it means for investors, economies and financial stability worldwide. Stay with us for the latest updates as markets react and the picture becomes clearer.
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