STOCK MARKETS — Golds take the lead in recovery on Toronto markets — Gold and precious metals sub-index soars 440.31 points

For the first time in months, gold stocks led the Toronto Stock Exchange, as the modest rebound in the price of the yellow metal helped most gold stocks rise in the report period ended Aug. 12.

The TSE 300 composite index rose to record heights Aug. 6 and 7 before falling back to 6,808.5 for a net loss over the report period of 94.58 points, or 1.4%. Trading was moderately heavy throughout the week, with volumes in the 80-to-100-million-share range.

The Canadian dollar dropped to US71.72 cents, down from US72.11 cents in the previous week, and also fell against the Yen and the major European currencies.

The London morning fix for gold on Aug.13 was US$328.60 per oz., up $9.75 over the week, as fears of both inflation and a brief supply shortage hit the market.

Platinum also had a great week, rising $8 to US$440 per oz., while silver enjoyed a more modest 12 cents boost, to US$4.46 per oz.

The gold and precious metals sub-index soared 440.31 points (5.4%) to 8,571.54 over the report period, climbing from 8,131 to beyond 8,600 before falling slightly on Aug. 12. As is often the case, Barrick Gold led the way, posting a $2.40 increase to hit $32.80.

Placer Dome also had a good week, gaining $1.65 to close out the period at $24.80. Its TSE dance partner Crystallex naturally fell, though only by 25 cents, to $5.60, as no significant developments took place in the two companies’ protracted legal battle over ownership of the Venezuelan gold project, Las Cristinas. Both companies’ shares were heavily traded.

Among TSE gold stocks, TVX Gold led the way in volume traded. TVX’s performance has been closely tied to the price of gold in recent months. And in accordance with the rise in the gold price, the company’s shares rose 75 cents to $6.80.

Other gainers among the heavily traded gold issues included Kinross Gold, up 15 cents to $6.35, Cambior, up 35 cents to $15.95, and Queenstake Resources, up 38 cents to $2.07. High-volume losers included Eldorado Gold, down 20 cents to $4.25, Cominco, down 25 cents to $37.75, and Southwestern Gold, down 50 cents to $8.50.

Southwestern recently reported drill results from the Poracota project in Peru, which it shares equally with Teck. For its part, Teck was unchanged at $28, with nearly $40 million worth of shares changing hands.

Montreal-listed junior golds enjoying a strong week included Quebec explorer Orient Resources, with a 71% rise to 15 cents, and Newfoundland explorer Noveder, with a 59% boost up to 80 cents. Vogue Resources, with interests in Quebec and Nevada, rose 42% to $2.13.

The rise in the gold price wasn’t enough to help Laguna Gold, which slipped 37% at 37 cents, or Matheson-area explorer Maude Lake Gold Mines, down 34% at 35 cents.

The TSE metals and minerals sub-index did not fare as well as its golden counterpart, dropping 159.47 points (2.9%) to 5,321.24 over the report period. Metal prices were relatively steady over the week, with the exception of nickel, which dropped 25 cents to $2.97 per lb.

Inmet was the most actively traded stock by a wide margin, with 8.2 million shares changing hands, though the price was unchanged at $7.90. The company recently reported much-improved second-quarter results as a result of higher base metal prices, despite recent problems at the Ok Tedi mine (in which Inmet holds an 18% interest) in Papua New Guinea, which kept the share price steady.

Inco was clearly hurt by the drop in the nickel price, shedding $2.35 to close at $40.85. Still, its Voisey’s Bay Nickel (VBN) shares managed to gain 15 cents, to $25.75, and make a rare appearance among the top value-traded stocks.