Gold prices have fallen for a seventh straight session as the Iran war escalated, triggering a sharp selloff in the commodity. The prolonged decline is set to erase Canada's benchmark stock index gains for 2026, with the country's heavily metals-exposed market bearing the brunt of the losses. Canadian stocks have been particularly vulnerable given their heavy weighting toward the mining sector.

Metals prices have been under pressure as geopolitical tensions in the Middle East have dampened demand for safe-haven assets. The seven-day losing streak marks one of the longest slumps for gold in recent months, with investors rotating away from traditional defensive positions. Canada's stock market, which derives significant value from precious metals producers and mining companies, is now poised to surrender all its year-to-date advances.

The selloff highlights the vulnerability of Canada's equity market to commodity price swings. With gold mining representing a substantial portion of the TSX Composite Index, the extended price weakness threatens to wipe out months of gains. The market's heavy tilt toward metals producers means that sustained weakness in gold could have outsized effects on Canadian market performance relative to other developed markets.