Gold stocks lift TSX to 19-month high; financials slip

Tue Mar 12, 2013 5:16pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index closed up on Tuesday and hit a 19-month high earlier in the day as gold shares made strong gains on the highest bullion price in nearly two weeks, helping offset worries about the European economy and weakness in financials.

The price of gold climbed more than 1 percent after a top European Central Bank official said the euro zone crisis was not over, which enhanced gold's safe-haven attraction. <GOL/>

Gold-mining stocks, which are still down about 15 percent since the start of the year, typically track the price of the precious metal.

"The long-term drivers are still in place for higher gold prices," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

"I'm quite positive on the long-term outlook for gold and for gold stocks by extension," he added.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 20.09 points, or 0.16 percent, at 12,878.58. It earlier reached 12,904.71, its highest point since August 2011.

The Toronto market's recent rally has led some investors to say that stock valuations are no longer cheap.

"Canada is expensive. Period. There is no way around it," said Wendell Perkins, a senior portfolio manager at Manulife Asset Management, who helps manage about C$1 billion in assets.   Continued...

People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch