CANADA STOCKS-Golds power TSX rally despite Europe doubts

Tue May 11, 2010 10:58am EDT
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* TSX gains 0.51 percent to 12,008.91

* Major gold producers up 5 pct (Adds details)

TORONTO May 11 (Reuters) - A surge in safe-haven gold shares held Toronto's main stock index in positive territory on Tuesday morning despite pressure on most other index sectors as the euphoria over last weekend's massive euro zone rescue deal faded.

Gold producers advanced in a flight to safety, overpowering weakness in industrial metals, and contributed a large chunk of the gains in the index's materials group, which was up more than 2 percent.

Gold hit five-month highs, rising to within $10 of the record high it hit in December, and the shares of several big producers gained by at least 5 percent. [GOL/]

Goldcorp (G.TO: Quote) was up 5.3 percent at C$46.93, while Barrick Gold (ABX.TO: Quote) gained 5 percent to C$47.19. Yamana Gold (YRI.TO: Quote) rose 5.1 percent to C$11.53, and Kinross Gold (K.TO: Quote) added 6.33 percent to C$18.98.

"(The Toronto market) lagged on the way up yesterday but we are outperforming today. The answer is simply gold," said Francis Campeau, broker at MF Global Canada in Montreal. "The rest is pretty much sideways, a little pullback after yesterday's party."

The Toronto Stock Exchange's S&P/TSX composite index gained 2.18 percent on Monday, compared with a 3.9 percent rise for the Dow Jones industrial average.

At 10:15 a.m. (1415 GMT) on Tuesday, the S&P/TSX composite index .GSPTSE was up 61.01 points, or 0.51 percent, at 12,008.91. Three of its 10 main groups were higher.   Continued...