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By Frank Pingue
TORONTO, Jan 5 (Reuters) - Toronto's main stock index was lower at midmorning on Monday as a sharp rally in energy shares was offset by a drop in gold prices that sent the index more than 100 points lower shortly after the open.
The price of gold dropped as low as $843.50 an ounce, pulling down the index's materials group as much as 4.5 percent, but the energy sector helped cushion the fall with a 2.3 percent gain, putting energy on track to record its fifth straight winning session.
The rally came as oil prices reversed early gains and fell toward $46 a barrel, but they remained up sharply from around $35 a barrel before Israel launched its Gaza offensive on Dec. 27.
At 11:10 a.m. (1610 GMT), the the S&P/TSX composite index .GSPTSE was down 42.31 points, or 0.47 percent, at 9,190.77. Earlier, it had fallen 118.15 points to 9,115.96 before moving briefly into positive territory with a gain of 13.56 points.
Seven of the index's 10 main groups were lower.
"A lot of people just have a wait-and-see attitude here right now and are cautiously optimistic after the market rallied in the last week of the year," said Bruce Latimer, trader at Dundee Securities.
The lower start to the week for the key index followed an 11 percent surge last week, when many traders were away for holidays, leaving the market prone to volatile swings.
Toronto-Dominion Bank (TD.TO) was 0.32 percent lower at C$43.95 after the bank said it plans to raise C$175 million in a preferred share offering to bolster its capital position.
$1=$1.19 Canadian Reporting by Frank Pingue; editing by Peter Galloway