* TSX rises 37.84 points, or 0.31 percent, to 12,209.88.
* Six of 10 index sectors higher; gold stocks drive gains (Updates to close. Adds analyst's comments)
By Trish Nixon
TORONTO, Sept 20 (Reuters) - Surging gold miners pushed Toronto's main stock index to a higher close on Tuesday in a market rally helped by investor hopes that the U.S. Federal Reserve will offer more economic stimulus.
At the end of its two-day meeting on Wednesday, the Fed is expected to announce plans to intervene in the bond market to push long-term interest rates -- already near historic lows -- even lower in a move known as Operation Twist. [FED/AHEAD]
"The market is optimistic that the Fed might introduce more stimulus in terms of making some new policies to provide more liquidity," said Marcus (Ming) Xu, director of equity investments at Genus Capital Management in Vancouver.
"If the liquidity is there, the market will like it ... if it's something else, it could induce more volatility."
Gold miners led the gains on the TSX as they tracked the safe-haven metal higher. Gold was set for its biggest daily gain in over a week after a downgrade to Italy's credit rating added to the strain on European leaders to solve the region's debt crisis. [GOL/]
Xu said that the ongoing Denver Gold Forum contributed to the gains as Canadian and global gold companies presented drill results and updates, and investors speculated on takeovers.
"You can see a lot of the junior to mid-sized gold stocks moved today, probably based on a lot of speculation from that conference."
Goldcorp (G.TO) was the index's most heavily weighted advancer, up 5.2 percent at C$52.62, followed by Barrick Gold (ABX.TO), which rose 1.6 percent to C$53.72.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended the session up 37.84 points, or 0.31 percent, at 12,209.88. Six of the 10 main index sectors were higher.
Banks and insurers helped support the index, adding 0.3 percent. Royal Bank of Canada (RY.TO) was among the most influential advancers, up 0.9 percent at C$47.04.
But base-metal miners dragged, extending losses from the previous session as copper closed near nine-month lows. Concerns that the global economic slowdown will crimp demand were compounded by an International Monetary Fund downgrade to its forecast for world growth. [MET/L]
"The nickname for copper is the metal with the PHD in economics," said Levente Mady, market strategist at Union Securities in Vancouver.
"And copper has been falling apart. That's kind of the flag-burning sign that maybe things are going to be a little bit rocky going into October and November here."
Potash Corp (POT.TO) lost 3.1 percent to C$51.72, while Teck Resources TCKb.TO fell 4.1 percent to C$36.11, and First Quantum Minerals (FM.TO) lost 7.6 percent to C$17.94.
In company news, National Bank of Canada (NA.TO) said on Tuesday it would buy HSBC's Canadian retail brokerage for C$206 million in cash as it expands its Canadian wealth management offerings. National shares rose 0.5 percent to C$69.10. [ID:nS1E78J0W3]
Shares of Bombardier Inc (BBDb.TO) fell 0.7 percent to C$4.21 after the company said it will cut production of its CRJ family of regional commercial jets in January as airlines delay new orders during uncertain economic times. [ID:S1E78J0AR]
Air Canada ACa.TO ACb.TO and its unionized flight attendants reached a tentative labor agreement on Tuesday, less than nine hours before the start of a strike that would have grounded much of the airline's fleet. Shares of Canada's biggest airline jumped 6.9 percent to C$1.70.
($1=$0.99 Canadian) (Editing by Jeffrey Hodgson and Peter Galloway)