TORONTO (Reuters) - Toronto's main stock index finished lower for a second straight session yesterday as modest gains across most sectors were not enough to offset the drag from investors cutting gold positions.

The index was volatile in early action as market players digested a speech by US Federal Reserve chairman Ben Bernanke, which offered few new details on further economic stimulus.

But the volatility washed away in end-of-session trading with the index holding near the unchanged mark into the close as market players reset ahead of the onslaught of earnings expected in the next several weeks.

"We rarely have the market take off on a Friday and this is pretty typical," said Peter Chandler, senior vice-president at Canaccord Wealth Management in Waterloo, Ontario.

"We're at the beginning of the earnings season and so the market needs to get some sort of a gauge as to whether equities are fairly valued, under- or overvalued here. There's been a very strong market performance."

The Toronto Stock Exchange's S&P/TSX composite index finished down 10.62 points, or 0.08 percent, at 12,609.07, but notched a weekly gain of 0.6 percent. It was the index's fourth straight weekly gain.

Seven of the TSX's 10 main sectors were higher, but the materials group, home to gold miners, lost 0.7 percent. Energy was also 0.2 percent lower.

Gold miners fell on a retreating bullion price while Potash Corpdropped on a report that China's Sinochem would not make a takeover bid for the company.

The gold subsector skidded 0.66 percent after the price of the precious metal snapped its two-day record-setting rally, as the US dollar rebounded following Bernanke's speech. He said that high US unemployment and low inflation point to a need for further economic stimulus.

"It looks like a lot of the fears of a very aggressive Fed turned into a little bit more of a cautious tone from Mr. Bernanke," said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management in Vancouver.

Barrick Gold Corp, the world's No. 1 producer, was down 1.14 percent at C$48.53, while Goldcorp fell 0.82 percent to C$44.99. Yamana Gold shed 2.48 percent to C$11.42.

Potash Corp fell nearly one percent to C$146.78 after sources told Reuters that Sinochem had abandoned efforts to counter BHP Billiton's $39 billion bid.

A handful of US earnings this week mostly buoyed market sentiment about other results to come, though worries about the US foreclosure crisis weighed.