May 11, 2010 / 9:19 PM / 7 years ago

CANADA STOCKS-Soaring golds help push TSX to one-week high

* TSX up 52.71 points, or 0.44 percent, at 12,000.61

* Bullion hits record above $1,230 an ounce

* Gold producers up steeply as price soars (Updates with quotes, details)

By Jennifer Kwan

TORONTO, May 11 (Reuters) - Toronto’s main stock index rose to its highest level in a week on Tuesday as gold miners got a boost from bullion prices that soared to record highs on flight-to-safety buying due to fears of euro zone debt contagion.

Gold prices spiked above $1,230 an ounce as economic uncertainties over European sovereign debt levels and the effects of the $1 trillion euro zone rescue package prompted investors to seek safety in the precious metal. [GOL/]

The index’s materials group was up 2.2 percent as major gold producers pushed sharply higher. Goldcorp (G.TO) jumped 5.9 percent to C$47.21, while Barrick Gold (ABX.TO) gained 4.3 percent to C$46.87. Yamana Gold (YRI.TO) rose 6.5 percent to C$11.68, and Kinross Gold (K.TO) added 7.3 percent to C$19.16.

“The standout performers are gold stocks. Gold seems to be following the playbook in terms of its increasingly being perceived as a safe haven from all this turmoil that is out there,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished up 52.71 points, or 0.44 percent, at 12,000.61, with seven of its 10 main groups higher. Earlier, it rose as high as 12,093.51, its highest level since May 4.

The move higher adds to the 2 percent gain notched on Monday.

“We’ve seen a great deal of volatility over the past five or six days. The encouraging thing with the TSX is that it’s staying above the 12,000 level. It’s hanging on to its robust gains from yesterday,” Picardo said.

Still, second thoughts about Europe’s emergency aid package continued to overhang markets, with global stocks mixed and the euro lower. [MKTS/GLOB] [FRX/]

“In the absence of any currency that can satisfy the requirements for a safe haven, gold seems to be benefiting from that vacuum,” Picardo said.

Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, said gold was boosted in part by what appeared to be “reflation trade”.

“All countries around the world, to a lesser or greater extent, have this problem of paying off its debt and investors are saying rather than holding a currency of any country, let’s own gold as an alternative to any currency.”.

Energy shares sank 0.6 percent as U.S. crude settled lower, at $76.37 a barrel, in volatile action as traders remained cautious about the European rescue package and the outlook for the global economic recovery. [O/R]

Suncor Energy (SU.TO) fell 2.1 percent to C$31.94 and Canadian Natural Resources (CNQ.TO) sank 1.2 percent to C$73.11.

Ivanhoe Mines (IVN.TO) fell 6.4 percent to C$15.49 as base metals prices slid. [MET/L] The Canadian exploration company said it expects its Oyu Tolgoi project in Mongolia to be one of the world’s top three copper-gold mines. [ID:nN11260782]

George Weston Ltd (WN.TO), North America’s largest baked goods maker and owner of top Canadian supermarket chain Loblaw (L.TO), said quarterly profit rose more than expected, and its shares were up 0.5 percent at C$74.00. [ID:nN11254709]

Fund manager CI Financial Corp (CIX.TO) posted a jump in quarterly earnings that was in line with expectations, buoyed by higher assets under management. It also raised its monthly dividend. Its shares were up 1.1 percent at C$19.93.

The blue chip S&P/TSX 60 index .TSE60 closed 2.59 points, or 0.37 percent, higher at 704.99.

$1=$1.02 Canadian Additional reporting by Ka Yan Ng; editing by Peter Galloway

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