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By Nivedita Balu

Aug 29 (Reuters) - Canada's main stock index closed at a

new record high on Friday, lifted by gains in gold shares and

renewed bets on an interest rate cut by the central bank

following weaker-than-expected domestic GDP data.

The Toronto Stock Exchange's S&P/TSX composite index

closed up 0.46% at 28,564.45 and hit a record high of

28,607.3 earlier in the day.

The index rose 4.8% for the month, recording its fourth

straight monthly gain.

Canada's economy contracted more than expected in the second

quarter, falling 1.6% on an annualized basis as exports

significantly declined.

Money markets increased their bets for a rate cut on

September 17 to 48% after the GDP data was released, from a

previous 40%.

Mining shares rose 2.4%, tracking higher gold

prices that were poised for their best monthly performance since

April. Gold mining stocks added 2.7%.

"Gold and silver stocks are keeping us afloat despite weak

GDP numbers today," said Alfred Lee, deputy chief investment

officer at Toronto-based Q Wealth Partners.

"Still plenty of data to come out before the next Bank

of Canada meeting. Unemployment data next week (is) probably the

data point that BoC will look at before deciding... basically a

coin flip right now until then," he added.

The Bank of Canada has kept rates steady at 2.75% at its

last three meetings since March.

During the week, top Canadian lenders reported growth in

quarterly profits and set aside lower-than-expected provisions

for bad loans as trade tensions with the U.S. eased.

Financials were up 0.2% for the week.

On Wall Street, the S&P 500 ended down from record highs on

Friday, with losses in Dell, Nvidia and other AI-related stocks.

The U.S. and Canadian stock markets will be closed on

Monday for the Labor Day holiday.