TORONTO - The Toronto stock market closed in positive territory Monday as gold hit a new record high and investors took in favourable housing and retail news.

The S&P/TSX composite index had started out strong, gaining as much as 158 points, but early advances in the commodity and financial sectors moderated and the main index finished up 44.69 points at 11,624.02, building slightly on last week's gain of 1.5 per cent.

Statistics Canada reported that overall retail sales rose one per cent in September, which was much better than the 0.6 per cent rise that economists had forecast.

Excluding the auto sector, sales ran ahead a solid 1.1 per cent -- the largest gain since January 2009 -- against the 0.4 per cent gain that had been forecast. Also, August retail sales were revised upward to show a gain of one per cent instead of the original 0.5 per cent increase.

And in the U.S., home resales far exceeded expectations last month, surging 10.1 per cent to 6.1 million units, the highest level in 2 1/2 years as first-time buyers rushed to take advantage of an expiring tax credit.

Sales, which were nearly 24 per cent above last year's level, had been expected to rise to an annual pace of 5.65 million.

"However, in spite of today's positive home sales report, weakness in other housing measures should serve as a reminder that the recovery in housing markets remains in its early stages and should provide support for policy remaining accommodative," said Nathan Janzen, an economist with RBC Economics Research

Janzen observed that U.S. October housing starts were down 10.6 per cent and the National Association of Home Builders sentiment index held steady at 17 in both October and November, down from 19 in September.

Greenback weakness helped send the Canadian dollar up 1.24 cents to 94.71 cents US.

The base metals sector led advancers, up 1.2 per cent as the December copper contract in New York rose 2.75 cents to US$3.14 a pound. Teck Resources (TSX:TCK.B) climbed 34 cents to $37.36.

First Quantum Minerals Ltd. (TSX:FM) is to buy Kiwara PLC, a mineral exploration and development company focused on base metals in Zambia, in a cash-stock deal valued at US$260 million. Its shares rose $4.71 to $80.11.

The energy sector was ahead 0.7 per cent as the January crude contract on the New York Mercantile Exchange moved up nine cents to US$77.56 a barrel. Suncor Inc. (TSX:SU) ran ahead 73 cents to $38.80.

Shares in Husky Energy (TSX:HSE) were up seven cents to $28.22 after the company announced the discovery of additional oil resources in the White Rose offshore area in Eastern Canada. Husky also acquired land adjacent to existing holdings in the North Amethyst area, about 315 kilometres east of St John's, N.L.

Heritage Oil PLC (TSX:HOC) shares advanced 19 cents to $9.04 after it said Monday it had agreed to sell its stakes in two Ugandan fields to Italy's Eni SpA for up to US$1.5 billion, and called off discussions related to a proposed takeover of Genel Energy International.

The gold sector held onto a slight gain of 0.37 per cent as bullion moved further into record territory. Gold rose partly because of U.S. dollar weakness but analysts said investors were also moving into safer havens as Iran staged military exercises. The December bullion contract on the Nymex surged $17.90 to a record close of US$1,164.70 an ounce. Kinross Gold Corp. (TSX:K) climbed 31 cents to $20.70.

The financials sector advanced 0.51 per cent ahead of earnings reports from the big banks over the next couple of weeks.

"I don't think the street is going to see any surprises," said Jennifer Radman, associate portfolio manager at Caldwell Securities.

"Their capital markets have done well and they will probably continue to do well."

Bank of Montreal (TSX:BMO), which reports Tuesday, gave up early gains to move down 32 cents to $53.55 while Royal Bank (TSX:RY) gained 66 cents to $58.19.

All TSX sectors were higher save for a 0.52 per cent dip in the utilities sector.

The TSX Venture Exchange moved 8.57 points higher to 1,416.63.

New York markets posted strong gains ahead of a slew of other key economic data this week.

The Dow Jones industrial average rose 132.79 points to 10,450.95.

The Nasdaq composite index moved up 29.97 points to 2,176.01 while the S&P 500 index gained 14.86 points to 1,106.24.

Analysts said that Monday's strong gains were also helped along by comments by U.S. central bank officials.

"The Chicago Federal Reserve president gave an interview with the Financial Times where he said that interest rates could be maintained at currently low levels until late in 2010, not the summer as we have become accustomed to hearing in Fed rhetoric," observed Andrew Pyle, investment adviser at ScotiaMcLeod in Peterborough, Ont.

"At the same time, St. Louis Fed president Jim Bullard has suggested that the program of mortgage-backed bond buying be extended beyond the scheduled expiry date of next March."

Key data out this week includes revised U.S. GDP growth for the third quarter. Many analysts expect the initial estimate of a 3.5 per cent annual growth rate to be lowered on Tuesday.

Also due this week are reports on home sales, unemployment, consumer confidence and demand for big-ticket manufactured goods.