STOCK MARKET — Golds have their day at last — Base metals outpace market; economic news strengthens Canadian dollar

The Toronto Stock Exchange moved little over the report period ended Sept.

30, with the broad-market TSE 300 index adding only 26 points in the five trading days to close at 7,040.23. Trading, however, was heavy, with 179 million shares on Sept. 24 setting a single-day record for activity on the TSE.

Mining stocks outpaced the broad market for the first time in weeks, with the gold and precious minerals sub-group posting a gain of 15%. Among the other market sectors, only the real estate and financial service sub-groups came close to matching the pace of the golds.

The Canadian dollar was strong against the major foreign currencies for most of the week as the economy posted strong growth and employment numbers, and as traders speculated that the Bank of Canada would soon tighten interest rates. On Oct. 1 their bets proved right: The Bank added a quarter-point to bring the overnight loan rate to 3.75% and the dollar jumped to US72.52cents, up 44 basis points from the previous week.

The report period saw a drastic resurgence in the gold price, which started with an uptick on Sept. 29. Fuelled by a sudden cashing-in of short positions, the price rose to US$336.80 per oz. at the Oct. 1 morning fix in London, a jump of $14.80 over the five trading days. It headed higher still in the afternoon, briefly touching US$339 per oz. before settling at US$337.15.

No less dramatic was the rise in the price of silver. The white metal rose 47cents to US$5.18 per oz. in London trading on Oct. 1. Platinum, however, didn’t make it to the party, settling $8 lower at US$435 per oz., but palladium recovered $5 to finish the period at US$193.50.

The TSE gold and precious minerals sub-group took maximum advantage of the bullion market’s new sentiment, reaching levels it hadn’t seen since June.

By the close on Sept. 30, the index had soared 1,186 points to 9,057.99 — an increase of 15% from Sept. 23. Placer Dome added a powerful $4.10 to close at $26.45, with rival Barrick Gold close behind, up $3.90 at $34.25.

Teck B-series shares were up $3.10 to $28.50.

The good times were spread throughout the sub-group: Cambior saw its shares rise $2.55 to $15.55; TVX Gold added $1.65 to close at $8.60; Kinross Gold retrieved $1.25 for a close of $7.65; and Greenstone Resources was up $2.25 at $14.15.

The recovery by the smaller producers was even more encouraging: Campbell Resources was 20cents higher at 98cents; Aurizon Mines added 30cents to close at $1.41; and Claude Resources was up 45cents at $2.80.

The base metal markets had some joy of their own, but it was alloyed with grief. Nickel added 21cents to reach US$3.08 per lb. in the London Metal Exchange morning session on Oct. 1. But zinc at last fell back to earth, losing 15cents and finishing the period at US62cents per lb. The fall virtually erased the backwardation in the zinc market. Copper and lead were little changed.

The TSE metals and minerals sub-group started the period badly, with the index touching its lowest point so far this year on Sept. 25. The sector clawed back some gains on Sept. 26, but the rally started in earnest after the weekend. By the close on Sept. 30, the index was at 4,833.10, up 80.88 points over its Sept. 23 level. Inco recovered 65cents from the previous week, closing at $34.55, while Falconbridge added 40cents to close at $25.80. Noranda, at $27.60, was up 60cents, and Cominco ran up $2.20 to finish at $34.60. Cameco roared back $3.60 to close at $51.85, and only Rio Algom settled lower, down 20cents at $30.10.

Among the smaller base metal companies, Inmet closed at $6.95, up 20cents, and Westmin was 5cents higher at $6.