CANADA STOCKS-TSX eases from record high as mining stocks slide in thin holiday trading

By Avinash P and Ragini Mathur

Dec 24 (Reuters) - Canada's main stock index fell on Wednesday with thinner-than-usual trading volumes in a shortened Christmas Eve session, following two successive record highs.

The S&P/TSX composite index .GSPTSE was down 0.3% at 31,981.98 points by 10:11 a.m. ET, retreating from the record peaks achieved on Monday and Tuesday when oil and mining shares propelled the market higher despite data revealing a sharper-than-expected contraction in the Canadian economy.

Toronto markets will close early at 01:00 p.m. ET on Wednesday for Christmas Eve and trading volumes are likely to be light throughout the day.

Gold mining stocks .SPTTGD emerged as the day's weakest performers, declining 1.6%, while the mining sub-index .GSPTTMT dropped 1.5%. The pullback comes even as gold and copper prices were hovering near all-time highs, with both sub-indexes having more than doubled in value this year.

"The risk of a major drop in the gold price would seem largely linked to a slowing of outright gold buying ... barring such an event, investor positions suggest that the extraordinary surge in gold prices is likely to continue," said economists at Societe Generale in a note.

With just one week left in the year, the Canadian benchmark is poised for its best performance since 2009, with a nearly 30% gain.

The heavyweight financial sector .SPTTFS, which has surged 31% this year, edged up 0.2% during Wednesday's session.

Looking ahead, market observers expect the next Federal Reserve chair to adopt a dovish stance, keeping U.S. monetary policy at the forefront of investment considerations, while analysts project a positive outlook for metal prices in the medium to long term.

"The upcoming appointment of a likely more dovish Federal Reserve chair, which we expect will weaken the (U.S. dollar) and prop up gold, offers further support for our stance," Societe Generale economists said.