Bullion drives Canada gold shares up, Barrick leads

Fri Jan 23, 2009 4:05pm EST
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By Cameron French

TORONTO (Reuters) - Strong gold prices drove shares of Canadian gold miners higher on Friday, sending some to the highest levels in months and making Barrick Gold Corp (ABX.TO: Quote) the country's biggest publicly traded company.

The price of gold popped above $900 an ounce for the first time since October 10, helped by a sliding U.S. dollar and flight to safety investments.

This sent the Toronto Stock Exchange's S&P/TSX global gold index up 5.3 percent, its highest level since July of last year.

The index has more than doubled in value since bottoming in October, when crashing asset values prompted hedge funds and other investors to liquidate resource stocks, even as gold prices sat at relatively high levels.

"We're getting a long overdue closure in the gap between bullion prices and the shares," said John Ing, president of Toronto investment dealer Maison Placements.

He said the sector is being fed by its traditional status as a hedge against inflation and a weak U.S. dollar. Many analysts expect inflation to rise and the U.S. dollar to drop as billions of dollars in U.S. stimulus programs work their way into the market.

Many gold mining stocks are now trading not far off the record highs reached early last year when gold prices hit record levels above $1,000 an ounce.

BARRICK TOP DOG   Continued...

<p>Aaron Regent, president and chief executive of Barrick Gold Corp listens during a news conference in Toronto, January 16, 2009. REUTERS/Adrien Veczan</p>