Toronto stocks closed broadly lower on Monday amid a sharp selloff by resource issues.

The S&P/TSX composite index plunged 287.12 points, or 2.1%, at 13,387.11 with all 10 of the TSX main groups in negative territory.

The materials sector led the fall, shedding 3.8%. The group was pulled lower by gold miners, despite a bounce in the price of the commodity.

Gold for February delivery gained US$1.30 to end at US$799.30 an ounce on the New York Mercantile Exchange.

Barrick Gold fell 89¢, or 2.3%, to $37.67, while the TSX gold subsector lost 4.5%.

The energy group declined 1.9% alongside the price of oil, which was hurt by the prospect that OPEC could decide to raise output when it meets in February.

Crude oil for January delivery settled down 64¢, or 0.7%, at US$90.63 a barrel on NYMEX.

Suncor Energy retreated $2.52, or 2.4%, to $102.82.

Husky Energy gained 44¢, or 1%, to $43.53 after the company said it has finalized terms with Newfoundland to allow Husky to expand its White Rose offshore oil field.

Growing fears of inflation in the United States also weighed Toronto stocks and dampened investor expectations of further interest rate cuts.

The financials group fell 1.3%. Bank of Montreal slid $1.74, or 3%, to $56.37 and TD fell $1.88, or 2.6%, to $70.62.

The junior S&P/TSX Venture composite index plunged 84.39 points, or 3.13%, to 2,607.95.

U.S. inflation jitters helped to boost the Canadian dollar. The loonie jumped 1.1¢ to close at US99.43 cents.

In New York, U.S. stocks tumbled on concerns that the housing slump, combined with surging prices, posed the threat of 1970s-style stagflation.

The Dow Jones industrial average slid 172.65 points, or 1.29%, to end at 13,167.20. The S&P 500 dropped 22.05 points, or 1.50%, to 1,445.90. The Nasdaq composite index tumbled 61.28 points, or 2.32%, to 2,574.46.

In an interview on Sunday, former Federal Reserve Chairman Alan Greenspan said the U.S. economy was showing early signs of stagflation as growth threatens to stall while food and energy prices soar.