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TORONTO (Reuters) - Canada's main stock index eked out a gain on Wednesday, buoyed by signs the U.S. central bank will launch further monetary stimulus and as resurgent gold miners offset declines in banks and energy companies.
The Federal Reserve is likely to deliver another round of monetary stimulus "fairly soon" unless the U.S. economy improves considerably, minutes from the bank's meeting of July 31-August 1 released on Wednesday suggested.
The details of the Fed meeting overshadowed comments from Canada's own central bank governor on a wide array of topics, including the effect of Canadian dollar strength on exports.
"The main event was what the Fed said," said Levente Mady, market strategist at Union Securities in Vancouver. "That got everything going, whether it's gold, silver, bonds, stocks. Everything is going up based on further liquidity being thrown at the system."
Mady warned, however, that investors may ultimately be disappointed. "The Fed is running out of bullets. Just because they discussed QE3 doesn't necessarily mean they come out in September with blazing guns."
The Fed's policy-setting committee is next due to meet on September 12-13.
The five biggest positive influencers on Canada's benchmark index on Wednesday were all gold producers, which have been among the worst performers so far this year.
"Golds are about to do what the technicians call a long-term break out and reverse this downtrend they've been in for months," said John Ing, president of Maison Placements Canada.
The price of bullion surged after the Fed minutes were released, driven higher by hopes for further stimulus for which gold could act as a hedge. <GOL/>
Goldcorp Inc (G.TO) rose 2.8 percent to C$39.96, Barrick Gold Corp (ABX.TO) gained 2.2 percent to C$37.28, Yamana Gold Inc (YRI.TO) jumped 4 percent to C$16.42 and Eldorado Gold Corp (ELD.TO) added 4.7 percent to C$13.01.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE unofficially closed up 2.07 points, or 0.02 percent, at 12,118.99.
Heavyweight banking and energy stocks kept the index hovering in the red for much of the day, with Royal Bank of Canada (RY.TO) ending down 1.1 percent at C$53.48 and Suncor Energy (SU.TO) 1.4 percent lower at C$31.73.
Telecom company Telus Corp (T.TO) dipped 0.7 percent to C$63.07 as it again sparred with a major investor over plans to consolidate its two classes of stock.
Japan on Wednesday reported its exports slumped the most in six months in July as shipments to Europe and China tumbled, adding to concerns over global demand after a string of dire trade figures from Asia's export engines.
Canadian retail sales dropped unexpectedly in June, confirming a weaker trend in consumer spending that will likely trim overall growth in the second quarter and raise questions about the Bank of Canada's hawkish slant on monetary policy.
In a sign of belt-tightening after rising commodity prices excited the industry, top global miner BHP Billiton delayed its planned $20 billion Olympic Dam copper expansion and said no major projects would be approved before June 2013.
"These mega-projects can bring mega-problems. There's a huge capital risk," Ing said.
Editing by Leslie Adler