CANADA STOCKS-TSX hits 2-yr high on record gold; Barrick soars

Mon Nov 8, 2010 4:53pm EST
 
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* TSX ends up 0.99 percent at 13,052.48

* Highest close since Sept. 2008 (Updates to close, adds details, commentary)

By Claire Sibonney

TORONTO, Nov 8 (Reuters) - Toronto's main stock index hit a a two-year peak on Monday, closing above 13,000 for the first time since Sept. 2008, as gold miners rallied sharply after the price of bullion powered to an all-time high.

Gold rose above $1,400 an ounce despite a firmer greenback as investors sought an inflation hedge from the U.S. Federal Reserve's massive bond-buying program, sending recently lagging gold shares up almost 3 percent. [GOL/]

Among the lead gainers, Barrick Gold Corp (ABX.TO: Quote), the world's No. 1 producer, shot up 4.7 percent to C$51.48, while Agnico Eagle (AEM.TO: Quote) jumped 3.8 percent to C$83.00.

"Given the quantitative easing that we saw last week, given the (weak) outlook for the U.S. dollar, that should provide a boost to commodities. That should also provide a boost as such to commodity-related stocks," said Philip Petursson, director of the portfolio advisory group at MFC Global Investment Management.

Oil, gold and base metals are typically priced in U.S. dollars and weakness in the greenback tends to drive their values higher.

Comments from World Bank president Robert Zoellick calling for leading economies to consider readopting a modified global gold standard to guide currency movements also provided underlying support for the precious metal and Canadian miners. [ID:nSGE6A702V]   Continued...