*TSX closes up 88.28 points, or 0.7 percent, at 12,278.88
*Gold tops $1,300 an ounce as data weighs on U.S. dollar
*RIM unveils tablet computer, shares down 2.6 pct (Updates to close)
By Claire Sibonney
TORONTO, Sept 28 (Reuters) - Toronto's main stock index climbed to a higher close on Tuesday on the back of rising metal prices, with gold at a record high and copper firming after weak U.S. economic data pushed the U.S. dollar lower.
The index's gold miners jumped 2.7 percent, with Barrick Gold Corp (ABX.TO), the world's No. 1 producer, rising 2.7 percent to C$48.26, and Agnico Eagle (AEM.TO) gaining almost 3 percent to C$73.11.
Spot gold rose as high as $1,307.70, a record price, on safe-haven flows as the greenback sank after U.S. consumer confidence in September fell to its lowest level since February. [GOL/]
"(Gold is) getting very toppy to put it mildly," said Stephen Wood, chief market strategist for North America at Russell Investments.
"Gold right now is taking on very volatile, very speculative characteristics. It's not terribly dissimilar in path to what we saw in oil two years ago."
Other market players have echoed the feeling that gold may have hit its peak.
"It's an investment based on fear and I think the fear is old news," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services. "If you're buying gold at this point, you've missed the boat."
Base metal miners, up 1.5 percent, also rallied alongside copper prices, with First Quantum Minerals (FM.TO) advancing 1.1 percent to C$75.85 and Ivanhoe Mines (IVN.TO) soaring almost 6 percent to C$25.22.
Ivanhoe said on Tuesday it has discovered a new mineralized zone at its Oyu Tolgoi copper-gold project in Mongolia. [ID:nN28153551]
The S&P/TSX composite index .GSPTSE ended up 88.28 points, or 0.72 percent, at 12,278.88. All of its 10 sectors were stronger, led by the weighty materials sector, which gained 1.9 percent. Financials were up 0.6 percent, and the energy group rose 0.4 percent.
Early in the day the index fell broadly as weak U.S. economic data, including a drop in U.S. home prices in July, weighed on investor sentiment. [ID:nN28177460]
"It seems that the bad news, although it's continuing ... it's not upsetting us as much as it used to and that's because we all know that corporate profits are strong and getting stronger," said Schwartz, noting that there have been no major warnings on earnings heading into the end of the third quarter.
Wood said he expects the TSX to remain volatile in reaction to U.S. data, but that the likelihood of a double-dip recession is being priced out of the market.
"I don't think you're going to get a clear break ...unfortunately or less satisfying is you kind of muddle through this continued sloppiness, high volatility around not much movement," he said.
"It's kind of like running on the beach with boots on, a lot of effort to not get very far."
Dragging on the index, Research In Motion RIM.TO dropped 2.6 percent to C$48.40 after the BlackBerry maker unveiled a tablet computer on Monday aimed at its core business customers as it tries to gain a foothold in a fast-growing market dominated by Apple's (AAPL.O) consumer-friendly iPad. [ID:nN28143698]
"This is an exciting product that they're having but it's coming out sometime in 2011. Well, by then Apple will have a new version of their iPad, and by then there are going to be at least 10 other competing versions of the tablet computer," Schwartz said.
"It's another example of RIM, too little too late."
Potash Corp (POT.TO), was little changed at C$150.50, after a U.S. federal judge said on Monday he would allow the discovery process to proceed in a lawsuit filed by Potash to fend off BHP Billiton's (BHP.AX) $39 billion hostile takeover bid. [ID:nN27253534]
($1=$1.03 Canadian) (Editing by Peter Galloway)