STOCK MARKETS — Little stirs on TSE as golds retreat to lower levels — Broad market fractionally higher, base metals slide marginally

The Toronto Stock Exchange traded in a narrow range throughout the report period ended May 20, finishing only a fraction higher than in the previous week. The TSE 300 composite index, now firmly back in plus-6,000 territory, was up 10.9 points to close at 6,260.14 on May 20.

The market was led by the oil-And-gas sub-group, followed by real estate and the utilities. Base metals fell slightly and the golds were among the worst performers on the index, losing about 2.5% of value. Volumes in the short (4-day) trading period were moderate, with just under 109 million shares changing hands on May 14, the busiest day.

The Canadian dollar put on a charge over the report period, to trade at US73.16 cents at noon on May 21 for a 1-week gain of 97 basis points.

Remarks by Gordon Thiessen, governor of the Bank of Canada, led some traders to believe an interest rate hike might be on the way as long as the economy continues to grow. The Loony was also higher against the European currencies, and only slightly lower against the recuperating Japanese yen.

The week also saw gold retreat from its test of the US$350-per-oz. mark, falling $6.75 from its May 14 level to US$342.25 per oz. on the May 21 morning fix. Silver also backed away, sliding 20 cents to finish the period at US$4.67 per oz. Platinum, still buoyed by fears that the Noril’sk mine in Russia may be headed for a capital squeeze, rose another $3.75 to finish at US$396 per oz. on May 21.

The TSE gold and precious minerals sub-group hit 9,268.23 at the close on May 20, for a loss of 226.4 points over the four trading days.

Barrick Gold was down 65 cents to US$33.60 and Placer Dome fell 15 cents to $22.55; also among the most active golds were Kinross, down 15 cents to $8.30, Cambior, off 75 cents to $18.05, and William Resources, 1 cents lower at $1.18. Price-sensitive royalty companies also fell, with Franco-Nevada Mining down 45 cents at $69.35 and Euro-Nevada Mining down $1.95 to $41.20.

Base metals were mostly higher on the London Metal Exchange, with copper leading the way. The red metal added 6 cents to close at US$1.18 per lb. in the May 21 morning ring, aluminum picked up 1 cents to US75 cents, and zinc was 2 cents higher to finish the reporting period at US61 cents. Nickel was unchanged at US$3.45 per lb.

The better prices did not translate into gains for the big base metal miners, with Inco shedding $1.30 to close at $45.45 on May 20 and rival Falconbridge off 20 cents to close at $30.80. The big winner was Cominco, up $1.50 to $39.75. Inmet was also higher, up 30 cents to $8.30, and Noranda added 25 cents to finish at $31.85.

Among the juniors, active trading continued in Pure Gold Resources and Ashton Mining of Canada, both of which are exploring for diamonds in Alberta’s Buffalo Hills area. Ashton saw 5.3 million shares turn over as it fell $1.75 to close at $4.95, and Pure Gold was 13 cents cheaper at 35 cents on a volume of 16.7 million shares.

Golden Rule Resources was spurned by investors when it announced that independent sampling of the Stenpad property in Ghana, which it shares with Alberta-listed Hixon Gold, called earlier results into question. Golden Rule was hit for a $4.45 loss, closing at $2.75, and Hixon fell 10 cents to $6.40.

Tenke Mining was 90 cents higher at $5.90, following the rebel victory in Zaire (renamed the Democratic Republic of Congo last week). Tenke is developing the Tenke and Fungurume copper-Cobalt projects in the southern province of Shaba.

On the Montreal Exchange, MSV Re-sources was 16 cents higher, closing at 51 cents. The company announced it had turned a $1.1-Million profit in the first quarter, on $8.8 million in revenue.