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TSX higher as gold surges
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The Canadian Press- Stock markets were modestly higher on Tuesday, buoyed by a new gold rally that took the price of the precious metal back above $1,800 US an ounce.
The September gold contract was quoted at $1,840 US an ounce at midday, up more than $48 from Monday's close.
Gold briefly hit $1,900 last week before falling precipitously after investors started to worry that the run was unsustainable.
The Dow Jones Industrial Average closed 27 points higher, to 11,560 The benchmark S&P/TSX Composite Index was up 129 points to 12,634.
The strong showing on the TSX followed a 177-point jump Monday while the Dow industrials racked up 255 points. But the TSX market is still down about 12.5 per cent from the highs of early March as investors fear the economy recovery has stalled.
"There isn't a lot of conviction in the market but there are signs that the market had priced in a double-dip recession scenario and maybe we're not getting that," ScotiaMcLeod wealth adviser Chris Kuflik said. "We don't know yet."
Research in Motion was one of the strongest gainers, up $1.84 or more than six per cent to $31.86. The embattled mobile device maker was up almost 5 per cent on Monday and 3.4 per cent on Friday.
The BlackBerry- and PlayBook-maker hasn't released any corporate news of note this week, but some analysts have turned positive on the stock. Research firm Macquarie raised its target price for the stock from $40 to $42 on Monday. The company's international prospects look strong and their new products are better than expected, Macquarie said in a note.
Oil was also higher, up $1.57 to $88.84 US a barrel, on supply concerns. Hurricane Irene forced several refineries and petroleum terminals to reduce production or shut down altogether.
The Canadian dollar was slightly lower, down 0.15 of a US cent to 102.20 when stock markets closed.
European bourses were mixed as a global accounting body criticized some European banking groups for not writing down their shaky Greek bond holdings enough.
The International Accounting Standards Board said some firms only wrote down the value of their Greek bonds according to a restructuring suggested by the Greek government, which would see their value drop by about 21 per cent.
However, if firms tried to sell those bonds on the open market now, they would get much less than that, IASB Chairman Hans Hoogervorst said in a letter to the European Union's market regulator, the European Securities and Markets Authority.
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