Dec 29 (Reuters) - Canada's main stock index closed lower on Monday as the precious metals rally paused and weighed heavily on mining stocks, starting the last week of the year on a somber note.
The S&P/TSX index closed down 0.32% at 31,896.59 points. However, the benchmark was poised for a gain of about 2% in December, marking its eighth consecutive monthly gain -- a streak not witnessed since 2014.
Mining shares led Monday's losses, giving back some of their yearly gains as the gold sub-index fell 4.02%, while materials shares, down 2.88%.
Gold prices slipped 4.3%, while silver slid 8.3% after touching a record peak above $80 an ounce earlier in the session as investors booked profits amid perceptions of easing geopolitical tensions, which reduced safe-haven buying. [GOL/]
Mining and financial shares have driven TSX's gains this year, lifting the index to a third consecutive annual gain and its strongest performance since 2009, with a 29% rise.
"This year was phenomenal. That was really driven by two key factors. The mining stocks- gold had a phenomenal year and silver had an even better year. What also helped the TSX was the Canadian bank stocks," said Alfred Lee, deputy chief investment officer at Toronto-based Q Wealth Partners.
"Because gold and silver have gone on such a phenomenal run this year, I wouldn't be surprised if we get a short term pullback some point next year," Lee said.
Shares of Kinross Gold were down 3.6%, while those of Agnico Eagle fell 5.3% and Barrick Mining fell 2.8%. Endeavour Silver closed down 1.9% and Silvercorp Metals fell 3.4%.
Capping the decline, energy shares gained 1.01%, tracking oil prices that rose above 2% as investors weighed Ukrainian peace talks against potential oil supply disruption in the Middle East. [O/R]
Market participants await Tuesday's release of U.S. Federal Reserve meeting minutes during an otherwise quiet data week.
(Reporting by Avinash P in Bengaluru; Editing by Shreya Biswas and Nick Zieminski)
By Avinash P and Nivedita Balu
