Source: The Canadian Press

The Toronto stock market closed with a solid gain Tuesday, taking most of its strength from gold stocks as the price of bullion rocketed to a record high.

The S&P/TSX composite index gained 43.12 points to 12,192.98, while the TSX Venture Exchange added 16.63 points to 1,622.20.

Gold stocks jumped as the December bullion contract on the New York Mercantile Exchange soared $24.60 to close at an all-time high of US$1,271.70 an ounce. Shares in Barrick Gold Corp. (TSX:ABX) gained $1.01 or 2.2% to C$46.41.

The value of gold, priced in U.S. dollars, increased as the greenback fell against other currencies like the euro. The move followed relief in the markets that new global banking regulations will require shaky European banks to shore up reserves, but will give them plenty of time to do so.

“I think people were quite negative that the European banks would have to issue a lot of equity so shied away from buying the euro, but (the regulations) don’t sound as draconian as people had imagined,’’ said Ian Nakamoto, director of research at MacDougall, MacDougall and MacTier in Toronto.

The Canadian dollar slipped 0.04 of a cent to 97.3 cents US.

Gold, considered a safe-haven investment, also got a boost after fresh data from Europe pointed to a lethargic global economy. Eurostat, the EU’s statistics office, said industrial production in the eurozone was flat in July and a survey of German investor sentiment was much weaker than expected.

News that U.S. retail sales rose 0.4% last month — the best advance since March — added to the upbeat sentiment on markets. Economists had expected a slightly smaller increase of 0.3%.

Data over the past two weeks have regularly beaten relatively modest economic forecasts and have reduced fears the U.S. economy will fall back into recession. The Dow Jones industrial average has gained 5.1% so far this month, while the TSX is up about 2.3%.

“It just seems like the path of least resistance for the markets right now is up until proven otherwise,’’ Nakamoto said.

The October crude oil contract fell 39 cents to US$76.80 a barrel on the mixed economic news. The Toronto energy sector lost 0.3%.

Shares in Enbridge Inc. (TSX:ENB) were up 21 cents at C$52.09 after the company said it found no crude leaking from a pipeline near Buffalo, N.Y., and had restarted it, soothing supply fears.

The base metals sector gained 0.1% following a 4.5% jump on Monday. The December copper contract fell 1.05 cents to US$3.47 a pound. Shares in Teck Resources Ltd. (TSX:TCK.B) lost eight cents to C$40.60.

The financial sector was down 0.3%. Shares in Royal Bank of Canada (TSX:RY) fell 27 cents to $54.33 after Moody’s Investors Service said it has placed all of its long-term ratings of the bank on review for a possible downgrade.

New York markets were mixed. The Dow Jones industrial average fell 17.64 to 10,526.49. The Nasdaq composite index was up 4.06 points at 2,289.77, while the S&P 500 slipped 0.8 of a point to 1,121.10.

In another encouraging sign for the economy, U.S. business inventories jumped in July by their largest amount in two years and business sales rebounded after two months of declines. The upturn followed months of weak sales as people remain worried about keeping their jobs.

In Canadian economic news, Statistics Canada reported that the labour productivity of Canadian businesses fell 0.8% in the second quarter following gains in the previous two quarters, while businesses operated at 76% of capacity, up 1.6 percentage points from the previous quarter.

The agency said the productivity decline reflected a slowdown in business output combined with a rise in hours worked.

In corporate news, discount retailer Dollarama Inc. (TSX:DOL) said its second-quarter net income fell 21% to $21 million due to the impact of foreign exchange, but overall sales were up 13% from the same time last year. Dollarama shares lost 53 cents to $26.42.

Kirkland Lake Gold Inc. (TSX:KGI) reported net income of $3.3 million in its first quarter of fiscal 2011, more than double its year-ago profit of $1.6 million. Shares in the gold miner gained 32 cents or 4% to $8.29.

Shares in DiagnoCure Inc. (TSX:CUR), a diagnostic test and laboratory services provider, fell eight cents or 6.8% to $1.10 after the Quebec-based company booked a loss of $1.7 million in the May-to-July period, shrinking a year-earlier loss of $4 million. Revenue fell 10%.

Montreal coffee services company Van Houtte is being sold again just three years after being taken private by an American private equity firm, this time to Vermont-based Green Mountain Coffee Roasters Inc. for $915 million.

And Danish toy giant Lego has lost a final trademark ruling in European Court against Canada’s Mega Brands (TSX:MB). Both companies make plastic building blocks and Lego has been trying to prevent its competitor from using a similar design. Shares in Mega Brands fell 1.5 cents to 46.5 cents.