With oil prices topping the US$49 a barrel mark, investors have sought refuge in gold on Friday — and that has proved to be good news for North American markets.

At midday, Toronto’s S&P/TSX was up 25.2 points or 0.3% to 8319.14, while the TSX Venture Exchange has gained 17.73 points or 1.18% to 1518.23.

In New York, the Dow Jones industrials hovered close to the unchanged mark; the index was up 10.39 points or 0.10% to 10051.21. The Nasdaq was ahead 5.70 points or 0.31% to 1825.59,while the S&P 500 was 2.41 points or 0.22% up at 1093.64.

The Canadian dollar was unchanged at US77.05¢.

Gold stocks proved to be the catalyst for markets Friday as gold futures and metals indices climbed to their loftiest levels in four months as record oil prices weighed on the broader market, raising investment demand for the precious metal. “Record high crude prices have rekindled the fire under the yellow metal,” one analyst told CBS MarketWatch. “Many now fear that record high energy prices will act as a brake on the economy, and subsequently investors are seeking other alternatives to park some of their cash, with gold once again a viable option,” he said. Given that backdrop, gold may “challenge” the US$440 level in the near term, he added.

Gold for December delivery rose to a high of US$415.50 an ounce on the New York Mercantile Exchange, a level not seen since April 13. It was last ahead US$6.10 at US$415.40.

In Toronto, the TSX gold sub-index was up 2.4% with gold stocks up and heavy volumes across the sector. Tech stocks were also up as a group, 1.65%, with Nortel Networks again leading the way. Energy stocks were up, too (0.10%), thanks to oil prices, while financials were off 0.12%.

Crude futures surged past US$49 a barrel in morning trading after closing at US$48.70 a barrel Thursday before easing off on the news coming out of Iraq. The benchmark September contract was last trading up 20¢ at US$48.90.

Iraqi forces have entered the Imam Ali Shrine in Najaf, the redoubt for Shiite cleric Muqtada al-Sadr, according to the Associated Press. There were no reports of fighting there and Iraq’s prime minister had earlier said he would not use force to take the mosque, the BBC said. Militants loyal to al-Sadr were understood to be ready to give up their arms peacefully in a move that would help al-Sadr amass political power in Iraq. Iraq’s leading Shiite cleric is expected to assume control of the religious site, according to the AP.

Meanwhile, U.S. Treasury Secretary John Snow said oil supplies have not been disrupted enough to justify releasing petroleum from the U.S. Strategic Petroleum Reserve. Snow said the Bush administration intends to keep adding oil to the reserve. The government’s additions to the emergency stockpile haven’t had much impact on prices, he said.

With oil at such levels, investors remained concerned about the impact of high energy prices on economic growth.

In the U.S., Google Inc. continued to see strong demand a day after its debut on Nasdaq. Google, which was offered at US$85 per share and closed Thursday at US$100.34, was up 1.81% in morning trading Friday.

Overseas, London’s FTSE 100 index edged was up 10.2 points to 4,372.8. Frankfurt’s DAX 30 and the CAC 40 in Paris were each off by 0.2%.

Tokyo’s Nikkei average issues slipped 14.39 points to 10,889.14. In Hong Kong, the Hang Seng index was off 19.77 at 12,376.90.