May 11, 2010 / 3:03 PM / 9 years ago

CANADA STOCKS-Golds power TSX rally despite Europe doubts

* TSX gains 0.51 percent to 12,008.91

* Major gold producers up 5 pct (Adds details)

TORONTO, May 11 (Reuters) - A surge in safe-haven gold shares held Toronto’s main stock index in positive territory on Tuesday morning despite pressure on most other index sectors as the euphoria over last weekend’s massive euro zone rescue deal faded.

Gold producers advanced in a flight to safety, overpowering weakness in industrial metals, and contributed a large chunk of the gains in the index’s materials group, which was up more than 2 percent.

Gold hit five-month highs, rising to within $10 of the record high it hit in December, and the shares of several big producers gained by at least 5 percent. [GOL/]

Goldcorp (G.TO) was up 5.3 percent at C$46.93, while Barrick Gold (ABX.TO) gained 5 percent to C$47.19. Yamana Gold (YRI.TO) rose 5.1 percent to C$11.53, and Kinross Gold (K.TO) added 6.33 percent to C$18.98.

“(The Toronto market) lagged on the way up yesterday but we are outperforming today. The answer is simply gold,” said Francis Campeau, broker at MF Global Canada in Montreal. “The rest is pretty much sideways, a little pullback after yesterday’s party.”

The Toronto Stock Exchange’s S&P/TSX composite index gained 2.18 percent on Monday, compared with a 3.9 percent rise for the Dow Jones industrial average.

At 10:15 a.m. (1415 GMT) on Tuesday, the S&P/TSX composite index .GSPTSE was up 61.01 points, or 0.51 percent, at 12,008.91. Three of its 10 main groups were higher.

Other sectors were lower as doubts resurfaced over the future of several debt-ridden European economies, one day after world equity markets rallied strongly on the back of a $1 trillion emergency euro zone rescue package. World stock markets were generally down on Tuesday.

Worries about economic growth spurred by the instability in Europe pushed non-gold issues in the materials group lower. Copper and gold miner First Quantum Minerals (FM.TO) fell 4.6 percent to C$70.09 even though its first-quarter profit soared on higher copper prices. [ID:nSGE6490VT]

Ivanhoe Mines (IVN.TO) fell 2.4 percent to C$16.14 even though the Canadian exploration company said it expects its Oyu Tolgoi project in Mongolia to be one of the world’s top three copper-gold mines. [ID:nN11260782]

Meanwhile, George Weston Ltd (WN.TO), North America’s largest baked goods maker and owner of top Canadian supermarket chain Loblaw (L.TO), reported a lower first-quarter profit compared with a year earlier, when it booked a big gain, and its shares rose 1.66 percent to C$74.89. [ID:nN11254709]

$1=$1.02 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway

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