TSX up on growing exports, while China attempts to rein in inflation

The TSX composite index was up 60.52 points, or 0.5%, to finish the Dec. 6-10 report period at 13,239.47, marking the second consecutive weekly gain as both Canada and the U.S. posted better than expected trade data.

Statistics Canada reported that Canada’s trade surplus with the U.S. was at an 18-year low in October, while its trade deficit with the rest of the world came fell to $1.7 billion from $2.3 billion in September. The week also ended with China steeping up its efforts to curb inflation. China ordered the country’s banks to increase their cash reserves, signaling the third reserve increase in five weeks.

Gold was off more than US$21 an oz., or 1.5%, to close the 5-day week at US$1,384.90. The Global Gold index followed suite, slipping 1.6% to 425.9 points. Copper hit a near record high as the spot price rose 12 cents to US$4.10 per lb. The Capped Metals & Mining index added 78 points, finishing at 1,466.21 for a 5.6% gain.

Copper producer First Quantum Minerals jumped $19.65 to end the trading period at $118.94. Inmet Mining was also up, rising $8.81 to $78.26 on copper speculation. Inmet recently agreed to purchase the remaining 30% of the Cobre Las Cruces copper mine in Spain that it doesn’t already own from Leucadia National for US$552 million in cash and shares.

Although the spot price for uranium oxide was down US$1 at US$60 per lb. this past week, it is 48% above its 2010 low of US$40.50, set March 1. Given the recent movement in uranium price, Uranium One was one the most active traders for the week, tacking on 35 cents to close at $4.85. Uranium producer Denison Mines was another active issue, finishing up 4 cents to $3.38.

Equinox Minerals jumped 41 cents on the week to end at $6.01. The company is making a A$1.25-bilion friendly takeover bid for Australia-listed Citadel Resource Group by offering shareholders one Equinox share for every 14.3 shares held, along with A10.5 cents cash for each Citadel share. Citadel holds a portfolio of Saudi Arabia exploration and development projects, including the flagship Jabal Sayid copper-gold project that has a measured and indicated resource of 28.7 million tonnes grading 2.4% copper. Equinox owns and operates the Lumwana open-pit copper mine in Zambia.

Paramount Gold and Silver rocketed up 43.8% to $2.59 on news that it had intersected significant gold and silver mineralization in 5 of 6 holes while drilling the 100%-owned San Miguel project in northwest Mexico’s Chihuahua state. The company believes that it has discovered the southern strike extension of a structural corridor that hosts the Palmarejo gold-silver mine of Coeur d’Alene Mines. So far, Paramount has traced the Don Ese vein by core drilling over a strike length of 550 metres. Results include 16 metres of 2.11 grams gold and 90.4 grams silver, starting 481 metres downhole in hole, 13.4 metres of 6.53 grams gold and 590 grams silver in hole 4, and 27 metres of 3.11 grams gold and 169 grams silver in hole 5.

After announcing its third quarter results, Harry Winston Diamond closed down $1.52 to $12.62. The rough diamond producer and luxury retailer reported net earnings of US$3.9 million, or 5 cents per share, on consolidated sales totaling US$140.9 million for the three months ended Oct. 31, 2010, compared to a US$200,000 loss on sales of US$74.8 million for the same period a year ago. “Diamond demand in the Far East continues to propel rough diamond prices as the Diavik mine transitions to underground production,” stated Harry’s Chairman Robert Gannicott. “Marketing efforts and store openings are successfully burnishing the Harry Winston brand to capture the branded luxury appetites of the emerging wealth of the newly developed parts of the world.”