* TSX ends down 1.2% at 19,556.15
* Posts its lowest closing level since June 23
* Materials sector loses 1.9% as gold falls
* Energy gains 0.8%; oil settles 0.8% higher
Sept 26 (Reuters) - Canada's main stock index fell to a three-month low on Tuesday as the price of gold fell and investors worried that elevated borrowing costs could trigger a recession.
The Toronto Stock Exchange's S&P/TSX composite index ended down 244.46 points, or 1.2%, at 19,556.15, its lowest closing level since June 23. Since mid-September, losses have grown to more than 5%.
Wall Street's main indexes also posted sharp declines on Tuesday as investors wrestled with the prospect of a long period of high interest rates.
"Investors are becoming 'Fed fatigued' ...trying to comprehend if there's a way out of a recession, and the current thinking is that higher rates will squash any growth stocks," said Peter Anderson, founder of Andersen Capital Management.
The materials sector, which includes precious and base metals miners and fertilizer companies, fell 1.9% as the price of gold briefly traded below $1,900 per ounce.
"Gold is back in the danger zone as Treasury yields rise alongside a stronger (U.S.) dollar," Edward Moya, a senior market analyst at OANDA, said in a note.
Industrials lost 1.6% and heavily-weighted financials were down 1.1%.
Energy was a bright spot, rising 0.8%, as the price of oil settled 0.8% higher at $90.39 a barrel.
Shares of Westshore Terminals Investment Corp ended 10% lower as RBC cut its price target on the stock. (Reporting by Fergal Smith in Toronto and Khushi Singh in Bengaluru; Editing by Tasim Zahid and Marguerita Choy)
