"Gold had been weak because fiscal cliff discussions were progressing," said Patrick Blais, a fund manager with Manulife Asset Management Ltd. in Toronto. His firm manages about $218 billion. "Now with talks breaking down, it's not surprising to see gold rebound, given the flight to safety."
U.S. House Speaker John Boehner on Thursday scrapped a vote on his tax plan, which would have allowed higher rates on annual income above $1 million. He said last night that President Barack Obama and Senate Majority Leader Harry Reid should come up with legislation to avoid more than $600 billion in tax-and- spending changes.
Now that Boehner has pulled his plan, House members and senators won't vote on the end-of-year budget issues until after Christmas, giving them less than a week to reach an agreement.
Gold mining stocks contributed most to gains in the S&P/TSX. Trading volume was 70 percent higher than the 30-day average at this time of the day.
Yamana added 3.6 percent to C$16.98 and Eldorado rose 2.9 percent to C$12.84. Gold for February delivery advanced 0.6 percent to $1,659.10 an ounce in New York.
The S&P/TSX Gold subindex rallied 1.5 percent as 26 of 32 members advanced.
RIM slumped 22 percent to C$11.64. Users who do not want enhanced services, including advanced security, are expected to generate "less or no service revenue," Chief Executive Officer Thorsten Heins said on a conference call yesterday. Service fees accounted for about $982 million in sales last quarter, out of a total of $2.73 billion.
The company posted adjusted earnings of 22 cents a share, beating the 35-cent loss predicted by analysts.
Stantec dropped 3.7 percent to C$39.46. Ben Cherniavsky, an analyst with Raymond James, lowered his rating for the company to market perform from outperform after the stock rose to its highest level since 1994 yesterday. The shares have risen 44 percent this year.
"We remain big believers in Stantec's long-term prospects but see a less attractive near-term risk/return profile on the stock," he said in a note to clients today.