To The Moon

On Monday, fueled by former U.S. President Trump's tariff threats against Europe concerning the Greenland issue, precious metals prices surged, driving gains in gold and silver mining stocks. The Canadian stock market extended its previous upward trend, closing higher for a fourth consecutive session. The S&P/TSX Composite Index rose approximately 0.2%, setting a new record high. Among the 11 primary sectors, the materials sector was the top performer. Iamgold Corp. led the index's advance after reporting preliminary production data that exceeded expectations. As Trump intensified his push to acquire Greenland, escalating fears of a potentially damaging trade war between the United States and Europe, gold and silver prices soared to historic peaks. Spot gold prices climbed as much as 2.1%, approaching $4,700 per ounce, while silver prices surged up to 4.4%. This rally was driven by Trump's aggressive stance, which weighed on the U.S. dollar and boosted demand for safe-haven assets. The U.S. announced it would impose new tariffs on eight European nations, including France, Germany, and the United Kingdom, which opposed its plan to acquire Greenland. These tariffs on European goods are scheduled to commence at a 10% rate on February 1, with an increase to 25% planned for June. According to informed sources, European leaders are actively discussing various countermeasures, including the imposition of retaliatory tariffs on American goods valued at 93 billion euros ($108 billion). Concurrently, despite these developments, concerns persist that Canada could face U.S. tariffs if it deploys troops to Greenland. The government led by Prime Minister Mark Carney has yet to make a decision on the matter. In a note to clients on Monday, Jean-Michel Gauthier, a Quantitative and Index Strategist at Scotiabank, wrote that S&P/TSX constituent companies are expected to post another strong performance in the upcoming Q4 earnings season, which begins next week. He forecasts quarterly earnings will increase by 14% year-over-year. The anxieties sparked by Trump's move to annex Greenland have once again propelled gold to record-breaking gains, with the price rising approximately 70% over the past 12 months. In recent weeks, investors have flocked to the gold market as geopolitical tensions intensified and the Federal Reserve's independence came under renewed attack. Gauthier wrote, "Overall, the leading indicators for 2026 earnings per share and the robust performance of precious metals should reignite interest in Canadian equities from both domestic and international investors. This momentum should help narrow the valuation gap with U.S. markets and further solidify the Toronto Stock Exchange's position for strong performance in the year ahead."