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TSX futures drop as Middle East tensions increase oil and weigh on gold

Futures tied to Canada's resource heavy stock index fell Monday, as threats to energy infrastructure in Gulf drove oil prices sharply higher. Gold and silver also declined.

As of 6:23 a.m., June futures for the?S&P/TSX Composite Index were down?1%? ET (1023 GMT).

Oil prices rose on Monday after Iran's Revolutionary Guards announced that they would strike power plants in Israel as well as sites supporting U.S. bases located in the Gulf to retaliate against any attack on their electricity network.

U.S. crude oil rose by 3% to?pass $100 per barrel as the markets prepared for further disruptions in energy supply through the 'Strait of Hormuz.

In its fourth week of fighting, the war has caused major damage to energy plants in the Middle East, and almost stopped shipping through Hormuz.

Goldman Sachs, a brokerage firm, raised its forecast for 2026 Brent and WTI. It said that 'extended disruptions of crude flows through the Strait and increased strategic stockpiling will likely leave a market more tight and risk-averse.

The Canadian market is highly vulnerable to fluctuations in crude oil prices, as it is the top commodity exported by the country.

The S&P/TSX Composite Index of the Toronto Stock Exchange has now dropped nearly 9% in the last week.

The spotlight will be on Canada’s?materials industry on Monday, as gold fell to a four month low and'silver' and platinum?slid to the lowest levels since mid-December amid fears of rising interest rates and an inflation spike due to the?Iran war.

Investors are also monitoring transportation headlines following the collision of an 'Air Canada Express CRJ900 with a Port Authority Emergency Vehicle on the LaGuardia airport runway late Sunday. The crash killed a pilot and copilot, and injured more than a dozen other people, according to U.S. officials.

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(source: Reuters)