Canada’s merchandise trade balance swung to a surplus in March as higher crude oil prices and surging demand for gold drove a sharp jump in exports while imports declined, data showed on Tuesday.

Statistics Canada said ​the country posted a $1.78 billion surplus in March, compared with a $5.11 billion deficit in the prior month.

It was the first time in six months that Canada ​posted a surplus as the war in Iran boosted crude oil prices, ⁠lifting the value of ⁠exports from Canada. While gold prices ‌fell in March, global demand for the precious metal helped boost exports further.

Analysts polled by Reuters had forecast a deficit of $2.88 billion.

Total exports rose 8.5 per cent to $72.8 billion, aided by a 24 per cent increase in metal and non-metallic product ⁠export category to a record high and 15.6 per cent increase in energy exports, which scaled its highest level since September 2022, StatsCan said.

Barring these two categories, Canada’s exports posted a modest ‌1.1 per cent increase in value terms and slipped 0.3 per cent in volume terms.

Following a 24.9 per cent increase in February, exports of motor vehicles and parts rose 4.5 per cent in March, the statistics agency said.

Share of exports going to U.S. dropped

Higher crude oil prices and increased shipments of ​passenger cars and light trucks drove Canada’s exports to the U.S. by 8.3 per cent to $48.51 billion in March, ⁠its highest level in a year. Imports from the U.S. dropped by 1.2 per cent to ⁠$41.44 billion.

Canada’s trade surplus with the U.S. reached its highest in six months ⁠at ⁠$7.1 billion and its share ​of exports to the U.S. dropped to 66.7 per cent — its lowest ever. That comes amid the ongoing trade war with the U.S., as President Donald Trump has slapped a range of tariffs ⁠on Canada in an attempt to try and shrink his country’s trade deficit with its neighbour.

Canada’s exports to countries other than the U.S. hit yet another record high in March. Exports to non-U.S. countries rose 9.1 per cent in March while imports from countries other than the United States ⁠fell 2.2 per cent in March, data ‌showed.

The Canadian dollar rose 0.03 per cent to 1.3620 after the trade data. Money markets are pricing in two 25 basis point rate cuts by the Bank of Canada by ⁠the end of the year.