September 14, 2010 / 8:49 PM / 9 years ago

CANADA STOCKS-Record-high gold prices push up TSX

*TSX closes up 43.12 points at 12,192.98

*Golds soar on weak U.S. dollar (Updates to close)

By Claire Sibonney

TORONTO, Sept 14 (Reuters) - Toronto’s main stock index rose on Tuesday as gold prices leaped to a record high and as U.S. economic data came in stronger than expected.

Gold miners led the way with Barrick Gold (ABX.TO) up 2.2 percent at C$46.41, and Goldcorp Inc (G.TO) climbing 3.6 percent to C$44.14.

Safe-haven gold surged more than 2 percent to above $1,270 an ounce, its biggest one-day gain in four months, as investors fled the U.S. dollar. [GOL/]

“Today’s gains have been quite exceptional,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

“Investors saw an opportunity to get into the gold group because the stocks have been lagging the upward trend in gold prices.”

Bruce Latimer, trader at Dundee Securities, said the relationship between the U.S. dollar and Chinese yuan was seen as driving the gold rush. “The U.S. dollar is breaking down against the yuan and that seems to be bullish for gold,” he said.

U.S. retail sales data also helped to whet investor appetite for risk. Sales at U.S. retailers posted their largest gain in five months in August on strong receipts at gasoline stations and clothing outlets. [ID:nN14247794]

“(The data) bolsters the case that the threat of a double-dip recession is receding. That was a topic that was front and center for most investors last month but thankfully that’s taken a back seat so far in September,” Picardo said.

The S&P/TSX composite index .GSPTSE closed up 43.12 points, or 0.35 percent, at 12,192.98, with six of its 10 main sectors higher. Its materials group, home to miners and fertilizer companies, was up almost 2 percent.

Energy shares were down 0.3 percent as oil prices eased on expectations of a quicker restart for a damaged Enbridge (ENB.TO) pipeline that sends oil from Canada to the U.S. Midwest. [O/R].

Enbridge rose 0.4 percent to C$52.09, while Suncor Energy (SU.TO) dropped 0.7 percent to C$33.90.

Heavily weighted financial shares were mixed, but down 0.3 percent as a group even though Canada’s financial services regulator ended a two-year moratorium on large capital outlays by banks, which frees banks to raise dividends, buy back shares, or make large acquisitions. [ID:nN14271313]

Shares of Royal Bank of Canada (RY.TO) retreated 0.5 percent to C$54.33 after Moody’s Investors Service said it might cut the bank’s deposit rating on concerns over RBC’s exposure to higher-risk wholesale banking. Toronto-Dominion Bank (TD.TO) was up 0.3 percent at C$76.14. [ID:nN14274532]

Also weighing on sentiment, Bank of Canada Governor Mark Carney said on Tuesday that a strong Canadian currency combined with weak U.S. demand for exports is making it harder for the economy to recover from recession. [ID:nN14137259]

Picardo noted that the central bank has been quite cautious in its recent assessments of the economy, and Carney’s comments were not unexpected.

$1=$1.03 Canadian Additional reporting by Jennifer Kwan; editing by Peter Galloway

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