TORONTO, Jan 12 (Reuters) - Canada's main stock index rose to another record high on Monday as a jump in gold prices, driven by increased uncertainty about the independence of the U.S. Federal Reserve, boosted metal mining shares.
The S&P/TSX Composite Index (.GSPTSE), ended up 261.77 points, or 0.8%, at 32,874.70, surpassing the record closing high on Friday.
"The best thing that Canada has to offer to the world are the materials and energy sectors, so we are really leaning heavily into that," said Victor Kuntzevitsky, a portfolio manager at Stonehaven, Wellington-Altus Private Counsel.
"Whatever the outcome is for the Canadian economy specifically, those are sectors that are more tied to global growth and global geopolitics."
Gold hit a record above $4,600 per ounce and silver reached a fresh peak as investors piled into safe-haven assets after uncertainty deepened over a Trump administration criminal probe into Fed Chair Jerome Powell.
"It feels that the Canadian economy is at a crossroads ... There are a lot of balls up in the air, so you want to be very careful with asset allocation," Kuntzevitsky said.
Analysts say Canadian immigration cuts could slow potential GDP growth, while the United States-Mexico-Canada Agreement, a continental trade pact that has shielded much of Canada's exports from U.S. tariffs, is up for joint review this year.
Canadian Prime Minister Mark Carney has vowed to make Canada's economy less reliant on exports to the U.S. market. He is set to visit China this week.
The materials sector (.GSPTTMT), which includes metal mining companies, climbed 2.4%. It was led by a 12% gain for the shares of Aya Gold & Silver Inc (AYA.TO).
The price of oil also rose, settling 0.6% higher at $59.90 a barrel, as concerns that Iran may reduce crude exports during a crackdown on the biggest anti-government demonstrations in years offset expectations that supplies could rise from Venezuela.
Energy added 0.5% and technology was up 1.7%.
Reporting by Fergal Smith and Utkarsh Tushar Hathi; Editing by Jonathan Ananda and Paul Simao
