August 4, 2010 / 9:12 PM / in 7 years

CANADA STOCKS-Strong golds, U.S. data push TSX higher

* TSX up 62.45 points, or 0.53 percent, at 11,845.05

* Strong bullion price boosts gold miners

* RIM shares drop on concerns over Saudi move (Adds details, quote)

By Jennifer Kwan

TORONTO, Aug 4 (Reuters) - Toronto’s main stock index rose on Wednesday, bolstered by a firmer bullion price and stronger than expected U.S. economic data, which fueled cautious investor optimism about global economic recovery.

Gold miners on the upside included Barrick Gold (ABX.TO), up 2.2 percent at C$43.38, and Goldcorp Inc (G.TO), up 2.4 percent at C$40.72, and Agnico-Eagle (AEM.TO), which rallied 4 percent to end the day at C$59.67.

The price of bullion broke above $1,200 an ounce as strong physical demand gave the metal its sixth straight daily gain. [GOL/]

U.S. Institute of Supply Management services activity data for July came in better than market expectations, which helped to boost investor optimism, analysts said. [.N]

As well, data showed U.S. private employers added 42,000 jobs in July, slightly better than economists had forecast. [ID:nN04224566] [ID:nEAP103300]

“The growth story is there but it’s at a somewhat subdued rate. If that’s the case, we shouldn’t bet too much on a double-dip scenario. I think the market is welcoming that bias,” said Sid Mokhtari, market technician and director, institutional equity research, at CIBC World Markets.

Mokhtari also said the market was in “risk-on” mode amid recent weakness in the U.S. dollar.

“The general thesis right now is that U.S. dollar weakness has been dominant the past little while, which has ignited the argument, or the bias, by a lot of investors that the risk-on trade is back on,” he said.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended the day up 62.45 points, or 0.53 percent, at 11,845.05, with eight of its 10 main sectors higher.

Mokhtari said the market was trading above its 200-day moving average, which was “very constructive.” However, strong resistance remains.

“From a resistance perspective you’re coming up to an important area that was previously not welcomed. That’s at about north of 12,000,” he said.

Fertilizer maker Agrium Inc (AGU.TO), rose 3.6 percent to C$67.41 after it said its quarterly profit rose on increased demand for agricultural inputs, higher crop nutrient margins and a jump in potash sales volumes. [ID:nN04220687]

Research In Motion RIM.TO was the top net loser, falling 4.5 percent to C$54.24 on concerns that Saudi Arabia will block its key messaging service.

RIM is facing mounting demands from governments in the Middle East and India that seek access to its vaunted encryption system, citing national security. [ID:nLDE6730RK]

The worries come as RIM launched its new BlackBerry Torch on Tuesday. [ID:nN04256810]

The security tussle and uncertainty about the Torch’s success weighed on RIM shares, said Peter Chandler, senior vice-president at Canaccord Wealth Management.

“They’re not getting a complete, clear bill of health,” he said.

The blue chip S&P/TSX 60 index .TSE60 closed 3.22 points, or 0.47 percent, higher at 691.75.

$1=$1.02 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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