CANADA STOCKS-TSX tumbles as strong US$ weighs on resources

Tue Nov 9, 2010 4:41pm EST
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* TSX ends down 135.85 points, or 1.04 pct, at 12,916.63

* Index touches highest level since September 2008

* Nine of 10 main groups lower as investors take profits (Updates to close, adds quotes)

By Jennifer Kwan

TORONTO, Nov 9 (Reuters) - Toronto's main stock index ended lower on Tuesday after touching a two-year high earlier in the session, as a steep rise by the U.S. dollar helped push commodity prices lower.

Spot gold XAU= soared to a record high for a fourth day running, touching above $1,424 an ounce, but retreated sharply by day's end as the stronger greenback prompted heavy profit-taking by investors. [GOL/] [FRX/]

Barrick Gold (ABX.TO: Quote) sank 0.5 percent to C$51.25, while Yamana Gold (YRI.TO: Quote) dropped 2 percent to C$11.69, helping the TSX's gold subgroup slide 2.7 percent. The broader materials sector, home to miners and fertilizer companies, was down 2.4 percent.

"The market has really been focused the past few days on the metals side of things, particularly as gold made all-time highs again today," said Aaron Fennell, senior market strategist at Lind-Waldock Canada. "But today, it dramatically turned around from that and I think there is a change in perspective."

The precious metal sank on a firm U.S. currency, which rose in part after being beaten down ahead of the Federal Reserve's decision to pump more money into the struggling U.S. economy, said Fennell. [FRX/]   Continued...