Canadian Stocks Are Pulling Back On Gold Weakness -- Canadian Commentary

(RTTNews) - The Canadian stock market is down in early trade Tuesday, following the modest gains of the previous session. The majority of the Canadian sectors are trading in the red this morning. Gold and mining stocks are among the weakest performers as precious metal prices fall.

European markets are currently turning in a mixed performance, following yesterday's sharp drop. Concerns about the situation in Greece may continue to weigh on the markets, as the debt-laden country remains at an impasse with its international creditors. Germany's investor sentiment also weakened more than anticipated in June.

Markets in the United States are struggling to find direction this morning. The S&P 500 and the Nasdaq are trading modestly to the downside, while the Dow Jones Industrial is posting modest gains. Traders remain cautious ahead of the Federal Reserve's monetary policy announcement due Wednesday afternoon.

The Fed is not expected to announce an increase in interest rates due to some recent signs of economic sluggishness, but traders will be paying close attention to any hints regarding the timing of the first rate hike.

After reporting a sharp jump in new residential construction in the U.S. in the previous month, the Commerce Department released a report on Tuesday showing that housing starts pulled back by more than expected in the month of May.

The report said housing starts tumbled 11.1 percent to an annual rate of 1.036 million in May after surging up 22.1 percent to a revised 1.165 million in April. Economists had expected starts to drop to an annual rate of 1.090 million from the 1.135 million originally reported for the previous month.

Meanwhile, the report also said building permits, an indicator of future housing demand, jumped 11.8 percent to an annual rate of 1.275 million in May from the revised April rate of 1.140 million. The increase in building permits came as a surprise to economists, who had expected permits to drop to a rate of 1.105 million.

The benchmark S&P/TSX Composite Index is down 54.40 points or 0.37 percent at 14,701.65.

On Monday, the index closed up 14.90 points or 0.10 percent, at 14,756.05. The index scaled an intraday high of 14,784.53 and a low of 14,651.36.

The Gold Index is falling by 1.25 percent. Gold prices edged lower Tuesday morning, staying in a tight trading range ahead of another highly anticipated Federal Reserve meeting.

Barrick Gold (ABX.TO) is lower by 2.26 percent and Kinross Gold (K.TO) is losing 2.75 percent. Royal Gold (RGL.TO) is down 1.00 percent and Eldorado Gold (ELD.TO) is declining by 1.54 percent. B2Gold (BTO.TO) is decreasing by 1.52 percent and IAMGOLD (IMG.TO) is weakening by 1.40 percent.

Goldcorp (G.TO) is falling by 1.31 percent, after it announced that it will sell 58,051,692 common shares of Tahoe Resources at C$17.20 per common share. The Capped Materials Index is also down 0.96 percent. Franco-Nevada (FNV.TO) is falling by 0.40 percent and Agnico Eagle Mines (AEM.TO) is lower by 2.01 percent. Silver Wheaton (SLW.TO) is losing 1.31 percent.

The Diversified Metal and Mining Index is falling by 1.22 percent. Sherritt International (S.TO) is losing 0.89 percent and Lundin Mining (LUN.TO) is down 1.57 percent. First Quantum Minerals (FM.TO) is decreasing by 1.16 percent and Teck Resources (TCK-A.TO) is lower by 0.13 percent. Capstone Mining (CS.TO) is also surrendering 2.50 percent.

The Energy Index is decreasing by 0.23 percent. Crude oil prices inched higher Tuesday morning ahead of U.S. supply data that is expected to signal the nation's shale oil companies are ramping down production.

This afternoon, the American Petroleum Institute will publish its weekly U.S. oil inventories report, followed by official data from the U.S. Energy Information Administration on Wednesday.

Suncor Energy (SU.TO) is falling by 0.61 percent and Canadian Oil Sands (COS.TO) is down 0.50 percent. Canadian Natural Resources (CNQ.TO) is weakening by 0.46 percent and Enbridge (ENB.TO) is losing 1.11 percent. Cenovus Energy (CVE.TO) is also declining by 1.00 percent.

The heavyweight Financial Index is lower by 0.36 percent. National Bank of Canada (NA.TO) is down 0.35 percent and Royal Bank of Canada (RY.TO) is declining by 0.42 percent. Toronto-Dominion Bank (TD.TO) is falling by 0.50 percent and Bank of Nova Scotia (BNS.TO) is losing 0.61 percent. Bank of Montreal (BMO.TO) is dipping by 0.27 percent.

Sun Life Financial (SLF.TO) is up 0.19 percent, after it agreed to acquire Bentall Kennedy for $560 million.

The Capped Health Care Index is down 0.36 percent. Valeant Pharmaceuticals International (VRX.TO) is losing 1.28 percent and Extendicare (EXE.TO) is lower by 0.70 percent.

The Capped Industrials Index is falling by 0.29 percent. Finning International (FTT.TO) is decreasing by 1.07 percent and Bombardier (BBD-A.TO) is declining by 0.75 percent.

The Capped Telecommunication Services Index is falling by 0.36 percent. BCE (BCE.TO) is declining by 0.62 percent and Rogers Communication (RCI-A.TO) is losing 0.52 percent.

TELUS (T.TO) is down 0.68 percent. The company announced that it intends to purchase and cancel up to 1,733,000 of its common shares through private agreements.

Yellow Pages (Y.TO) is advancing by 2.89 percent, after it agreed to acquire the ComFree/DuProprio Network.

On the economic front, Eurozone employment increased slightly in the first quarter, Eurostat reported Tuesday. Employment rose 0.1 percent from the prior quarter, the same rate of growth as seen in the fourth quarter.

Germany's investor sentiment weakened for a third straight month in June to its lowest level in seven months as fears of a 'Grexit' intensified. The ZEW Indicator of Economic Sentiment fell more-than-expected to 31.5 from 41.9 in May, survey data from the Mannheim-based Centre for European Economic Research, or ZEW, showed Tuesday.

Economists had expected a reading of 37.3. The latest score was the lowest since November, when the reading was 11.5.

Germany's consumer prices increased for the fourth straight month in May at the fastest pace in seven months, as initially estimated, final data from the statistical office Destatis showed Tuesday. Consumer prices rose 0.7 percent from last year, following a 0.5 percent increase in April. The annual increase matched the preliminary estimate published on June 1.

The decline in U.K. consumer prices proved to be short-lived as they increased in May, while factory gate prices continued its downward trend, official data revealed Tuesday.

Consumer prices rose 0.1 percent from last year as expected by economists, offsetting April's 0.1 percent fall, which was the first drop since 1960, the Office for National Statistics reported. This was the first rise in four months.

Another report from ONS showed that factory gate prices decreased for the eleventh consecutive month in May mainly driven by petroleum and crude oil prices. Output prices dropped 1.6 percent from a year ago, in line with forecast, and slower than a 1.7 percent decrease in April. As expected, output prices edged up 0.1 percent for the third straight month on a monthly basis in May.

In commodities, crude oil futures for July delivery are up $0.22 or 0.37 percent at $59.74 a barrel.

Natural gas for July is down 0.049 or 1.70 percent at $2.84 per million btu.

Gold futures for August are down $8.30 or 0.70 percent at $1,177.50 an ounce.

Silver for July is down $0.193 or 1.20 percent at $15.89 an ounce.