CANADA STOCKS-TSX posts strong rise as gold, metals gain

Tue Sep 28, 2010 4:48pm EDT
 
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 *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: Quote), the world's No. 1 producer, rising 2.7
percent to C$48.26, and Agnico Eagle (AEM.TO: Quote) 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: Quote) advancing
1.1 percent to C$75.85 and Ivanhoe Mines (IVN.TO: Quote) 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: Quote) 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: Quote), 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: Quote) $39 billion hostile takeover
bid. [ID:nN27253534]
 ($1=$1.03 Canadian)
 (Editing by Peter Galloway)