Toronto's main stock index turned higher on Tuesday morning, hitting a one-month peak and reversing steep losses in volatile trade as gold prices rallied following grim U.S. consumer confidence data.

Among the most influential gainers, Barrick Gold Corp (ABX.TO: Quote) rose 2.6 percent to C$47.64 and Goldcorp Inc (G.TO: Quote) picked up 2.7 percent to C$47.69 after a report showed U.S. consumer confidence unexpectedly dropped in October to its lowest level in two and a half years.

The TSX was already outperforming U.S. markets, despite a torrent of negative headlines, as traders cited talk that a European Union summit for Wednesday has been canceled.

This is a weird market where we're trading on headlines more than any fundamental news. So the market came off sharply after a rumor that tomorrow's EU meeting was postponed and then the market rallied back when the news was actually denied (and) that tomorrow's meeting will be held as expected, said Francis Campeau, a broker at MF Global Canada in Montreal.

We've underperformed so much on the way up ... today seems like we're playing catch-up.

At 10:43 a.m. (1443 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 36.89 points, or 0.3 percent, to 12,199.17, after falling more than 1 percent shortly after the open, the index rebounded to rise as high as 12,203.51, its strongest level since September 21.

Economically sensitive financials were down 0.3 percent, however, after the Bank of Canada held its key interest rate steady, dropping any mention of the need to raise rates as it slashed its growth and inflation projections.

Toronto-Dominion Bank was the heaviest laggard, falling 0.6 percent to C$74.50. TD was further pressured after discount brokerage TD Ameritrade (AMTD.O: Quote), in which the bank holds a large stake, reported lower than expected quarterly profit. 

On the domestic earnings front, Canadian Pacific Railway (CP.TO: Quote) slipped 1.5 percent to C$58.95 after the No. 2 railway reported a lower third-quarter profit as fuel costs rose 43 percent.

West Fraser Timber (WFT.TO: Quote) fell 2.1 percent to C$41.67 after posting a sharp drop in third-quarter profit, as a weak U.S. housing market continued to hurt the lumber and wooden panels maker.

In other company news, Research In Motion (RIM.TO: Quote) was down 0.9 percent at C$23.35 after announcing BlackBerry business cloud services for Microsoft Office 365.

($1=$1.01 Canadian)