CANADA STOCKS-Gold miners hit hard as TSX drops to one-week low

Thu Sep 12, 2013 5:06pm EDT

* TSX falls 124.37 points, or 0.97 percent, to 12,701.05
    * All of the 10 main index sectors decline
    * Gold-mining shares shed more than 5 percent
    * Drops in Goldcorp, Barrick have biggest impact on index

    By John Tilak
    TORONTO, Sept 12 (Reuters) - Canada's main stock index
dropped to its lowest point in a week on Thursday as gold-mining
shares tracked a dive in bullion prices on market fears the U.S.
Federal Reserve will announce a pullback of stimulus measures at
its meeting next week.
    Bullion, seen a safe-haven asset, shed 3 percent after
gaining sharply in recent weeks on news of escalating tension in
Syria. Gold prices fell as the Fed meeting neared and as
investors watched Russia and the United States try to hash out a
deal to disarm Syria of its chemical weapons and prevent
military strikes. 
    The price of silver tumbled 5.4 percent. 
    Gold-mining shares recorded the biggest single-day
percentage fall in more than three months. They are down 42
percent so far this year. 
    "They have had a terrible ride," said Barry Schwartz, vice
president and portfolio manager at Baskin Financial Services.
"The problem is I can't figure out what the price of gold is
going to be a year from now. Nobody can."
    "It's a cyclical trading investment, and right now it's
going to be out of favor," he added.
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 124.37 points, or 0.97 percent, at
12,701.05, after dropping as low as 12,693.86, its lowest level
since September 4. 
    All of the 10 main sectors on the index were in the red.
    "The factors that had inspired the big rally in gold and
silver a couple of weeks ago are unraveling," said Colin
Cieszynski, senior market analyst at CMC Markets Canada.
    "Traders are still confused about what's going to go on,
particularly with (Fed) tapering and the situation in Syria," he
added. "People aren't completely sure about which way to go."
    The Toronto index's materials sector, which includes mining
stocks, declined 3.5 percent. Gold producers lost 5.2 percent.
    Goldcorp Inc fell 6.3 percent to C$26.81, and Barrick
Gold Corp slipped 5.3 percent to C$18.19. The two
stocks had the biggest negative influence on the index.
    Silver Wheaton Corp declined 5.2 percent to
C$24.83.
    Financials, the index's most heavily weighted sector, gave
back 0.6 percent. In the group, Royal Bank of Canada was
down 0.7 percent at C$65.74.
    Shares of telecoms providers stumbled 1.5 percent on a
report that three big foreign operators might be considering
bidding in an upcoming spectrum auction. Rogers Communications
 declined 1.2 percent to C$42.95, and BCE Inc 
slipped 1.7 percent to C$43.49.
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