The Toronto stock market saw another triple-digit gain Tuesday as commodity prices got a boost from optimism that the global economic recovery has legs.
The S&P/TSX composite index added 145.35 points to 11,247.97 after soaring more than 250 points earlier in the day.
The gold sector led the TSX, gaining 5.2 per cent, as the December bullion contract on the New York Mercantile Exchange added $21.90 (U.S.) to close at a record high of $1,039.70.
This topped the previous record of $1,033.90 seen in March, 2008.
The yellow metal was given a boost as the U.S. dollar continued to weaken amid fears that inflation will result from massive government stimulus spending.
The weakening greenback also caused the loonie to take flight. The Canadian dollar added 0.93 cents to 94.38 cents. This followed a report that Arab states and other countries were contemplating an end to the U.S. currency's role in the pricing of oil.
Paul Vaillancourt, director of asset allocation at Franklin Templeton Managed Investment Solutions, said concerns that the U.S. dollar will lose its status as the global currency are pushing gold to a "pseudo-currency" status.
"What's driving gold today is the fear of looming massive inflation, and I think that is something that's preoccupying the markets," Mr. Vaillancourt said.
He added that a positive third-quarter earnings season - which will kick off in the U.S. on Wednesday when aluminum producer Alcoa issues its results - will be necessary if the market is to continue its upward climb.
"I think now for the markets to continue to grind forward, we'll need to start to see some decent earnings," he said.
New York markets also moved ahead Tuesday after Australia's central bank unexpectedly raised interest rates by a quarter point to 3.25 per cent. The move makes Australia the first major economy to increase the cost of borrowing amid signs its recovery from the global slump is gaining momentum.
The Dow Jones industrials rose 131.50 points to 9,731.25. The Nasdaq composite index climbed 35.42 points to 2,103.57, while the S&P 500 index gained 14.26 points to 1,054.72.
In Toronto, the energy sector was ahead 2 per cent as the November crude oil contract gained 47 cents to $70.88 a barrel.
The base metals sector added 2 per cent while financial stocks lost 0.1 per cent.
The TSX Venture Exchange gained 27.15 points to 1,281.40.