TSX climbs as gold shines; Bank Of Canada holds rates

(Updates with morning prices)

By Ragini Mathur

April 16 (Reuters) - Canada's main stock index climbed on Wednesday, as surging gold prices boosted materials shares, while the Bank of Canada held borrowing costs steady at its interest rate meeting.

Toronto Stock Exchange's S&P/TSX Composite Index rose 0.3% to 24,135.11 points.

The Bank of Canada

held its key policy rate

at 2.75%, its first pause after seven consecutive cuts, and warned that the U.S. tariffs could cause inflation spike and deep recession in Canada under worst-case scenario.

After the decision, Canadian government bond yields rose across the curve; the loonie was trading 0.38% higher to the greenback.

Materials group was leading the gains, up 2%, as gold mining firms surged after the yellow metal prices

extended their record run

to breach $3,300 per ounce.

"Gold hitting new highs will add support to the Canadian markets and clearly that's been strong because of the inflation hedge, the geopolitical uncertainty as well as many central banks increasing their gold reserves," said Ian Chong, Portfolio Manager at First Avenue Investment Counsel.

Energy shares also jumped 1.7% as oil prices rose around 1% after the market drew some strength from the possibility of trade talks between China and the U.S. and a report that Iraq will cut oil production in April.

Information technology shares were down near 1%, tracking losses on tech-heavy Nasdaq after AI darling Nvidia took a hit from U.S. restrictions on chip sales to China.

Trump on Wednesday ordered a probe into potential new tariffs on all U.S. critical minerals imports, on top of reviews into pharmaceutical and chip imports.

Later in the day, Federal Reserve Chair Jerome Powell's remarks will draw attention of investors looking for clarity on the central bank's strategy to address recent market volatility and growing economic concerns. (Reporting by Ragini Mathur in Bengaluru; Editing by Sahal Muhammed)