* TSX up 60.58 points, or 0.5 pct, at 12,222.86
* Golds lead gains, financials drag
* European debt crisis uncertainty weighs (Updates prices, adds details, comments)
By Jon Cook
TORONTO, Oct 25 (Reuters) - Toronto's main stock index hit a one-month peak on Tuesday afternoon, reversing steep losses early in the day, as gold prices rallied on safe-haven buying following grim U.S. consumer confidence data.
Gold miners were among the most heavily weighted gainers with Barrick Gold Corp (ABX.TO) up 3.2 percent at C$48.83 and Goldcorp Inc (G.TO) rising 2.6 percent to C$48.83 after a report showed U.S. consumer confidence dropped unexpectedly in October to its lowest level in 2-1/2 years. [GOL/] [ID:nN1E79N1P8]
The TSX outperformed U.S. markets, which were pulled down by a torrent of negative reports, including talk that a key European Union debt summit scheduled for Wednesday was in danger of being canceled.
"This is a weird market where we're trading on headlines more than any fundamental news," said Francis Campeau, a broker at MF Global Canada in Montreal. "So the market came off sharply after a rumor that tomorrow's EU meeting was postponed and then the market rallied back when the news was actually denied (and) that tomorrow's meeting will be held as expected."
At 1:07 p.m. (1707 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 60.58 points, or 0.5 percent, at 12,222.86, its highest level since Sept. 21. The index had dropped more than 1 percent shortly after the open.
Economically sensitive financials were down 0.3 percent after the Bank of Canada held its key interest rate steady, dropping any mention of the need to raise rates as it slashed its growth and inflation projections. [ID:nN1E79O0F9]
Canadian Imperial Bank of Commerce (CM.TO) was the heaviest laggard, falling more than 1 percent to C$74.41.
Toronto-Dominion Bank (TD.TO) was down 0.9 percent at C$74.29 after discount brokerage firm TD Ameritrade (AMTD.O), in which the bank holds a large stake, reported lower than expected quarterly profit. [ID:nN1E79K1LD]
"They're down, but not dramatically by global standards," said Paul Hand, managing director at RBC Capital Markets. "We've had a pretty good rally anticipating a positive outcome (from the European meetings), which I don't think will be as neat and clean as politicians are wont to do."
On the Canadian earnings front, Canadian Pacific Railway (CP.TO) slipped 1.6 percent to C$58.86 after the country's No. 2 railway reported a lower third-quarter profit as fuel costs rose 43 percent. [ID:nL3E7LP223]
In other company news, Research In Motion RIM.TO was down 1.5 percent at C$23.22 after announcing BlackBerry business cloud services for Microsoft Office 365. [ID:nWNAB5050]
($1=$1.01 Canadian) (Additional reporting by Claire Sibboney; editing by Peter Galloway)