TORONTO (Bloomberg) Canadian stocks fell for a second day, led by mining companies, as precious metal prices declined on speculation that an extension of US tax cuts will boost growth and cut demand for alternative investments.

Goldcorp Inc., Ivanhoe Mines Ltd., Barrick Gold Corp. and Silver Wheaton Corp. were among the biggest contributors to the drop in the Standard & Poor’s/TSX Composite Index. Materials producers, the third-largest of the index’s 10 industries, fell two percent as a group, more than any other.

The S&P/TSX lost 98.67 points, or 0.7 percent, to 13,152 as of 4pm in Toronto. The main benchmark for Canadian equities closed at a two-year high on December 6 before slipping yesterday as gold prices retreated from a record after US President Barack Obama agreed to extend tax cuts. Gold extended declines yesterday as the US dollar rose for a third day.

“When you see a significant move in gold like we have today, that will carry a decent impact to the market,” said Philip Petursson, director of institutional equities at MFC Global Investment Management in Toronto.

Barrick Gold, the world’s largest producer of the metal, fell 2.2 percent to C$53.47. Goldcorp, the second-largest by market value, dropped 2.9 percent to C$45.99. Silver Wheaton, a Vancouver-based purchaser and seller of the metal, declined 2.8 percent to C$38.66.

Gold for February delivery dropped 1.8 percent to $1,383.20 an ounce on the New York Mercantile Exchange. Silver for March delivery slid 5.1 percent to $28.252 an ounce after reaching the highest price since March 1980 yesterday.

“In absence of what could be viewed as a very strong reserve currency, gold is that reserve currency of last resort, and silver has been playing catch-up to gold,” Petursson said.

Ivanhoe slumped 15 percent to C$25.28 for the biggest decline in the S&P/TSX. The Vancouver-based miner with operations in Asia and Australia gave Rio Tinto Group the right to boost its stake to 49 percent, making a takeover of Ivanhoe unlikely, Raymond Goldie, an analyst at Salman Partners Inc. in Toronto, wrote in a report.