Gold lifts TSX, U.S. debt roils traders

TORONTO • A run-up in gold stocks helped send the Toronto stock market modestly higher Monday as investors nervous about the debt impasse in Washington pushed bullion prices higher.

The S&P/TSX composite index gained 29.6 points to 12,788.25 with traders worried that the debt standoff might bring the U.S. to the brink of default.

Meanwhile, the Canadian dollar was lower by US0.19¢ to US96.97¢ amid a housing report that missed expectations.

The Dow Jones industrial average fell 136.34 points to 14,936.24, Nasdaq was down 37.37 points to 3,770.38 and the S&P 500 index dropped 14.38 points to 1,676.12.

On the Toronto Stock Exchange, the gold sector was the leading advancer, up about 2.1% as investors looking for safety pushed December bullion ahead US$15.20 to US$1,325.10 an ounce.

“Gold will rally in periods when uncertainty is high and thus investors seek the safety of a hard asset,” observed Craig Fehr, a Canadian markets specialist at Edward Jones in St. Louis.

Allied Nevada Gold Corp. surged $1.09 or 27.9%, to $5 after it reported record gold production. Shares in Rio Alto Mining Ltd. shot up 8¢, or 4.42%, to $1.89 after it reported a record 59,157 ounces of gold production in the third quarter.

The energy sector was ahead 0.04% as the November contract on the New York Mercantile Exchange fell US81¢ to US$103.03 a barrel.