CANADA STOCKS-TSX dives as gold loses safe-haven luster

Wed Mar 14, 2012 10:42am EDT
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* TSX drops 70.11 points, or 0.56 pct, to 12,467.58

* Strong US$, Fed pushes gold sharply lower

* Eight of 10 sectors lower; materials tumble 2.5 pct

By Jennifer Kwan

TORONTO, March 14 (Reuters) - Toronto's main stock index sank on Wednesday, bucking the global equities trend, as gold lost its safe-haven appeal as the U.S. dollar strengthened after the U.S. Federal Reserve upgraded its economic outlook the day before.

The greenback hit a fresh 11-month high against the yen and a new one-month high against the euro on the Fed statement, which came after a string of U.S. data that indicate a firm economic recovery.

Oil and gold prices skidded as gains in the U.S. currency can pressure dollar-denominated commodities by making them more expensive to buyers using other currencies.

Gavin Graham, president at Graham Investment Strategy, said gold's safe-haven bid has been diminished by the stronger economic outlook and an easing of concerns about the euro zone's debt problems.   Continued...