TSX closes at record high, boosted by gold stocks and rate cut bets

(Updates to close)

By Nivedita Balu

Aug 29 (Reuters) - Canada's main stock index closed at a new record high on Friday, lifted by gains in gold shares and renewed bets on an interest rate cut by the central bank following weaker-than-expected domestic GDP data.

The Toronto Stock Exchange's S&P/TSX composite index closed up 0.46% at 28,564.45 and hit a record high of 28,607.3 earlier in the day.

The index rose 4.8% for the month, recording its fourth straight monthly gain.

Canada's economy contracted more than expected in the second quarter, falling 1.6% on an annualized basis as exports significantly declined.

Money markets increased their bets for a rate cut on September 17 to 48% after the GDP data was released, from a previous 40%.

Mining shares rose 2.4%, tracking higher gold prices that were poised for their best monthly performance since April. Gold mining stocks added 2.7%.

"Gold and silver stocks are keeping us afloat despite weak GDP numbers today," said Alfred Lee, deputy chief investment officer at Toronto-based Q Wealth Partners.

"Still plenty of data to come out before the next Bank of Canada meeting. Unemployment data next week (is) probably the data point that BoC will look at before deciding... basically a coin flip right now until then," he added.

The Bank of Canada has kept rates steady at 2.75% at its last three meetings since March.

During the week, top Canadian lenders reported growth in quarterly profits and set aside lower-than-expected provisions for bad loans as trade tensions with the U.S. eased.

Financials were up 0.2% for the week.

On Wall Street, the S&P 500 ended down from record highs on Friday, with losses in Dell, Nvidia and other AI-related stocks.

The U.S. and Canadian stock markets will be closed on Monday for the Labor Day holiday. (Reporting by Nikhil Sharma; Editing by Sahal Muhammed and Nia Williams)

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