Gold miners push TSX to one-week high as bullion jumps

Fri Aug 23, 2013 4:46pm EDT
 

By John Tilak

TORONTO (Reuters) - Canada's main stock index touched a one-week high on Friday as sluggish U.S. economic data renewed hopes that the U.S. Federal Reserve might delay winding down its stimulus program, lifting bullion prices and shares of gold miners.

The rise on the benchmark Toronto index outpaced that on the S&P 500 .SPX as the index maintained its lead over its U.S. counterpart in August to date.

After a wave of positive global data cheered investors earlier this week, figures released on Friday showed sales of new single-family homes in the United States slumped in July to their lowest level in nine months.

That spurred the market to bet that a Fed stimulus pullback might come later and not sooner, pushing oil prices higher and bullion to jump 1.6 percent to hit its highest level in more than two months. <GOL/> <O/R>

"There is a reappraisal about whether the Fed will proceed with the September taper," said Fergal Smith, managing market strategist at Action Economics. "That's proved to be quite supportive for commodities."

However, he cautioned that "the change in Fed policy and the impact on the market is a big unknown," and "carries a risk for commodities markets".

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 87.95 points, or 0.69 percent, at 12,762.30, after rising as high as 12,776.14, its highest level since August 16. It also ended the week higher.

All of the 10 main sectors on the index advanced.   Continued...

 
A Toronto Stock Exchange (TSX) logo is seen in Toronto in this November 9, 2007 file photo. REUTERS/Mark Blinch