STOCK MARKETS — Gold issues heat up on a cool TSE — Broad market moves lower, led by base metal miners

The Toronto Stock Exchange fell 199.56 points over the trading period Dec.

10-16, closing at 6,567.43 as the mining stocks and the conglomerates headed southward in moderate-to-heavy trading; but for a change, the golds came back strongly.

The story in the currency markets was still the U.S. dollar, which continues to surge as a result of heavy movement out of Asian currencies.

The Canadian dollar and most of the European currencies continued to slide against the greenback. A half-point increase in the Bank of Canada’s overnight rate (to 4.5%) held up the currency briefly, but by noon on Dec.

17, the Loony was trading at US70.28 at noon on Dec. 17, up only fractionally against the U.S. dollar.

The Japanese yen, which had been in free fall, reached the end of its bungee cord when the Japanese government announced a 2-trillion-yen tax cut to stimulate the economy and the Bank of Japan, selling U.S. dollars for the first time since 1992, moved vigorously to halt the slide. The yen soared to about 127 yen to the U.S. dollar from lows around 131 yen.

The gold price, which slid for most of the reporting period, bounced back strongly on Dec. 17 to US$286.10 per oz. to finish $1.05 higher than a week before. Platinum, on the other hand, finally came back to earth, falling $27 to US$350 per oz. after trading as low as US$340.50. Sales from Russian suppliers caught the market napping on Dec. 16, and sudden panic selling by funds and pro traders dragged down the price.

Palladium was lower, too, falling $16 over the same period to US$190. The supply squeeze in the silver market kept the white metal buoyant, allowing it to hit US$6.05, up 22.

The TSE’s gold and precious minerals subgroup added a surprising 10.5% over the report period, closing 547.01 points higher at 5,746.25. Barrick Gold added $2.70 to close at $24.40, and Placer Dome was $1 better at $16.

Cambior put on $1.10 to clsoe at $8.30; while Greenstone Resources added $1.10 to finish at $6.05.

The royalty companies, as usual, responded quickly to the rally in the gold market, with Franco-Nevada Mining up $4.65 at $28.50 and stablemate Euro-Nevada Mining $2 higher at $15.85.

Base metal prices were generally lower, with nickel down 2 at US$2.68 per lb. and copper off by the same amount at US79. Zinc was steady, aluminum fractionally lower, and lead up 1. The TSE metals and minerals sub-group saw a new low of 3,645.25 before closing Dec. 16 at 3,660.47, down 284.95 points or 7.2% of value over the report period.

Westmin Resources was the busiest issue, with 12.5 million shares moving.

The issue was off 30 to close at $5.50, just above Boliden’s $5.40 bid.

Westmin’s board recommended rejecting the Boliden offer. The company also announced that reserves at the Lomas Bayas project had doubled, since resources at the adjacent Fortuna del Cobre deposit had been moved into the reserve category.

Cameco, which announced a deal to buy uranium from dismantled Russian nuclear weapons had fallen through, fell $8.95 to $41.55 with 3.8 million shares traded. Lionore Mining was also busy, with 6.5 million shares traded and a modest 2 rise to $1.52.

Losses were general among the big base metal miners, with Rio Algom off $2.45 at $24.25, Inco losing $1.70 to close at $24.75, Noranda falling $1.65 to $23.65, and Cominco $1.55 lower at $19.70.

Among the TSE juniors, the star was Western Copper, which has been pulling some very long intersections of massive sulphide from its San Nicolas project in Mexico. Western Copper was $1.20 higher at $4.50 on a volume of 2.6 million shares.