December 2, 2009 / 1:06 PM / 8 years ago

Surging gold price lifts TSX to 14-month high

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch</p>

TORONTO (Reuters) - Toronto’s main stock index rose to its highest level in more than 14 months on Wednesday as a surge in gold prices pushed up gold-mining shares.

Shares of Barrick Gold Corp rose 4.6 percent to C$50.43 a day after the company said it had eliminated its fixed-price hedge book.

Goldcorp shares chipped in with a gain of 2.7 percent to C$48.19, while Kinross Gold shares rose 4.4 percent to C$23.07.

The rally in gold-mining shares came as the price of gold shot to a record high above $1,216 an ounce on expectations for further weakness in the U.S. dollar.

“Investors have over time become more trustworthy of where the Canadian market is headed,” said Gareth Watson, Canadian Equity Advisor, portfolio advisory group, ScotiaMcLeod.

“They have more confidence that, considering where the global economy is, there is still more upside because of the weighting we have toward commodities.”

Watson did not put much stock in the fact that the TSX did not relinquish any of Tuesday’s meaty 2.27 percent gain, noting that gold miners did nearly all the heavy lifting.

Energy stocks gave back a slice of their recent gains as a slide in crude prices to under $77 a barrel dragged the weighty sector down 0.7 percent and capped the index’s overall gain.

Shares of EnCana Corp fell 2 percent to C$56.43, while shares of Canadian Natural Resources fell 0.6 percent to C$71.00.

Shares of fertilizer producer Potash Corp, a key contributor to the TSX’s overall gain, jumped 5.8 percent to C$128.73 after the company’s chief executive made bullish comments regarding North American demand for crop nutrients.

The S&P/TSX composite index ended up 72.41 points, or 0.62 percent, at 11,779.73. Earlier it rallied as high as 11,802.43, its highest level since September 30, 2008.

($1=$1.05 Canadian)

Editing by Peter Galloway

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