July 8, 2010 / 7:24 PM / in 7 years

CANADA STOCKS-TSX drops after two rising sessions as gold sags

* TSX falls 0.22 percent to 11,372.39

* Seven of 10 sectors lower, led by materials

* Energy ekes out gain with firm oil price (Updates to midafternoon)

TORONTO, July 8 (Reuters) - Toronto’s main stock index dropped on Thursday afternoon after two sessions of gains as falling bullion prices dragged down gold shares.

Gold miners sagged as the price of gold held below $1,200 an ounce. Growing optimism over the global economy limited investor interest in the precious metal and other safe-haven assets. [GOL/]

“There’s a little profit-taking in that sector. It’s certainly had a good run. It’s been one of the better sectors in the last little while,” said Bruce Latimer, trader at Dundee Securities.

The S&P/TSX global gold index .SPTTGD, which tracks mid- to large-sized gold miners in several markets, fell 2.44 percent. The materials group, home to gold issues, was off 0.97 percent.

Barrick Gold Corp (ABX.TO) dropped 3.7 percent at C$44.25, and Goldcorp Inc (G.TO) slid 2.3 percent at C$42.34.

At 2:45 p.m. (1845 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 24.88 points, or 0.22 percent, at 11,372.39. Market momentum was to the downside with seven of the index’s 10 main groups were lower.

Some consolation was seen in the oil and gas group, which was one of three advancing sectors on Thursday. The price of oil bounced above $75 per barrel, supported by a global rally in riskier assets and an industry report showing a sharp drop in U.S. crude oil inventories. [O/R]

That helped boost big-name energy issues such as Canadian Natural Resources (CNQ.TO) add 1.56 percent to C$36.38, while EnCana (ECA.TO) rose 1.9 percent to C$33.79.

($1=$1.04 Canadian)

Reporting by Ka Yan Ng; Editing by Frank McGurty

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