TSX rises on gold miners, U.S. data

Wed Feb 22, 2012 3:34pm EST
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By Jon Cook

TORONTO (Reuters) - Toronto's main stock index extended gains on Wednesday afternoon after hitting a five-month high in the previous session, as gold mining issues were boosted by higher bullion prices and strong U.S. housing data.

Gold shares surged nearly 2 percent after bullion hit a three-month high on Wednesday as technical buying helped the precious metal reverse initial losses. <GOL/>

"We are seeing all the funds step in. It (technical buying) is the only thing at the moment that we can pin it on," said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC.

Gold's upswing boosted the index's heavyweight materials sector by 1.7 percent. Barrick Gold (ABX.TO: Quote), the world's top producer, jumped 2 percent to C$49.32 while Goldcorp (G.TO: Quote) rose 2.4 percent to C$49.30.

At 2:55 p.m. (1955 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 73.98 points, or 0.6 percent, at 12,697.34, its highest level since September 7, 2011.

The market mood was also lifted as U.S. home resales surged in January to a 1-1/2 year high, while the supply of properties on the market was the lowest in almost seven years, pointing to a nascent housing recovery in Canada's top trading partner.

"The prospects of the U.S. are beginning to get a little brighter," said Rick Hutcheon, president and chief operating officer at RKH Investments.

"There are signs that there may be some improvement in the nearer term and that's what the market has been waiting for."   Continued...

Two men walk down the street from the King and Bay intersection in the financial district in Toronto February 22, 2011.    REUTERS/Mark Blinch