February 10, 2014 / 1:38 PM / 4 years ago

TSX steady as anxiety about Fed lifts gold miners

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

TORONTO (Reuters) - Canada’s main stock index was little changed on Monday as uncertainty about U.S. monetary policy helped lift the price of bullion and shares of gold producers, offsetting weakness in energy shares.

Buoyed by a 1 percent gain in the bullion price, shares of gold miners rose 3.3 percent.

Investors digested Friday’s sluggish U.S. jobs report and were nervous ahead of testimony by U.S. Federal Reserve Chair Janet Yellen at congressional committees this week. The market has been anxious for clues about the Fed’s monetary policy direction since Yellen took over from Ben Bernanke last week.

Despite sharp selloffs in recent weeks due to concerns about weak growth in emerging markets, the Toronto market is up about 1.3 percent this year and has outperformed U.S. stocks.

Those gains have been fueled primarily by a higher price for bullion, which thrives on economic weakness and market uncertainty as investors perceive the commodity as being a safe haven.

Gold-mining shares are up more than any other sector this year and form a sizable part of the index’s weight.

“This uncertainty has driven, and restored, gold as a classic story of value,” said John Ing, president of Maison Placements Canada. “Not only do I believe the worst is over, I fully expect 2014 to be an up year for gold.”

Ing sees strength in the sector boosting the broader Canadian benchmark this year.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 7.68 points, or 0.06 percent, at 13,794.18, after rising as high as 13,839.48, its strongest level in more than two weeks. Eight of the 10 main sectors on the index were in the red.

Barrick Gold Corp (ABX.TO) climbed 2.3 percent to C$21.35, and Goldcorp Inc (G.TO) advanced 2 percent to C$28.81.

But financials, the index’s most heavily weighted sector, edged lower, with Royal Bank of Canada (RY.TO) losing 0.2 percent to C$69.98.

With the price of Brent crude oil dropping, several energy stocks declined. Canadian Natural Resources Ltd (CNQ.TO) was down 1.2 percent at C$37.39.

In corporate news, shares of Cameco Corp (CCO.TO) shed 3.1 percent to C$22.71 after the uranium miner reported weaker-than-expected quarterly results on Friday. The stock was one of the most heavily weighted decliners on the market.

($1=$1.11 Canadian)

Editing by Meredith Mazzilli; and Peter Galloway

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