CANADA STOCKS-Miners drag TSX down; index set to drop 2 pct on week

Fri Jun 7, 2013 10:48am EDT

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* TSX falls 46.17 points, or 0.37 percent, to 12,363.16
    * Gold miners lead decline as bullion falls
    * Gold drop overshadows robust jobs data

    By Alastair Sharp
    TORONTO, June 7 (Reuters) - Canada's main stock index fell
on Friday, hurt by declines in major gold producers, as
investors moved funds out of the safe-haven precious metal and
into riskier assets in the wake of strong North American jobs
data.
    With the retreat, the Toronto Stock Exchange's S&P/TSX
composite index is on track for a weekly decline of
more than 2 percent, and is trading lower than where it started
the year.
    Bullion prices fell more than 2 percent after U.S. payrolls
data beat expectations, supporting hopes that the recovery of
the world's biggest economy was still on track. 
 
    That hit Canada's gold miners particularly hard, with
Goldcorp Inc down 3.4 percent at C$29.60 and Barrick Gold
Corp off 3.3 percent at C$20.93.
    "When gold is going up people ignore it, when gold is going
down it's an additional reason to sell gold miners," said Gavin
Graham, chief strategy officer at Integris Pension Management.
    Graham said in the absence of inflation fears, for which
gold can be held as a hedge, and as investors speculate on how
soon the U.S. Fed will end its bond buying program, gold was
falling out of favor.
    Added to that, "there is a great deal of dislike for gold
stocks at present simply because of the concerns about rising
costs and bringing in projects on time," Graham said.
    Surprisingly robust new jobs data in Canada did little to
brighten the somber mood, with financial stocks mixed. Only four
of the ten main sectors recorded gains.
    By mid-morning the index was down 46.17 points, or 0.37
percent, at 12,363.16.
    "The fact that half the market is made up of commodities ...
that's going to have quite a large effect on the index even if
the underlying fundamental economic news is good news," Graham
said.
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