June 7, 2010 / 4:57 PM / 9 years ago

CANADA STOCKS-TSX hangs on to gains as gold rallies

* TSX up 21.66 points at 11,591.49

* Gold stocks rally 3 percent

* Consumer staples, telecoms up

* Base metals weigh

* RIM sinks 4 pct ahead of new iPhone launch (Updates prices, adds details, quotes)

By Claire Sibonney

TORONTO, June 7 (Reuters) - Toronto’s main stock index rose after a wobbly start on Monday as lingering global economic uncertainty powered a rally in safe-haven gold shares, but weakness in base metals limited the gains.

Gold erased early losses to hit a three-week high but copper tumbled to eight-month lows as investors, fearing a meltdown in the euro zone, fled commodities and other assets perceived to be risky. [GOL/] [MET/L]

Gold-mining stocks soared more than 3 percent with Barrick Gold Corp (ABX.TO), the world’s largest producer, up 3.4 percent at C$45.44, and Goldcorp Inc (G.TO) 3.4 percent higher at C$46.28.

The base-metals mining subsector was almost 2 percent lower as Teck Resources TCKb.TO, Canada’s biggest base metals producer, fell 1.6 percent to C$32.21, and First Quantum Minerals (FM.TO) dropped 3.2 percent at C$52.70.

“In the materials space, you’re seeing some more rotation from more cyclical commodities like copper into more safe-havens like gold,” said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management in Vancouver.

Zohny noted that non-cyclical, or “defensive”, stocks such as consumer staples, up 1.6 percent, and telecoms, up 0.2 percent, were also benefiting.

“I think that’s a sign of the uncertainty in the economy,” he said.

At 12:39 p.m. (1639 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 21.66 points, or 0.2 percent, at 11,591.49. Trading was choppy and the index slipped into negative territory several times after the open.

Also dragging on the index, BlackBerry-maker Research In Motion RIM.TO sank more than 4 percent to C$60.65. Its key competitor, Apple Inc (AAPL.O), is widely expected to introduce a new iPhone.

$1=$1.05 Canadian Reporting by Claire Sibonney; editing by Peter Galloway

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