In the age of meme stocks and economic and political instability, gold is a stable investment that doesn’t experience the same volatility as stocks and other tradable assets. If you are looking to hedge against large drops in the market, you may want to consider investing in gold as a way to protect your wealth. Read on to learn how to invest in gold and how to buy gold in Canada.
How to buy gold in Canada: choosing the asset type
If you want to gain exposure to gold, there are a few ways to invest in gold in Canada.
You can buy and store physical gold
You can invest in gold ETRs or gold stocks
You can trade gold on the financial markets as contracts for difference (CFDs).
What is the price of gold per oz in Canada now?
Real-time data for commodities is provided by market makers, not the exchanges. Prices are indicative and may differ from the actual market price.
Who is most likely to be researching how to buy gold?
Finder data suggests that men aged 25-34 are most likely to be researching this topic.
Response
Male (%)
Female (%)
65+
7.02%
3.04%
55-64
7.49%
5.15%
45-54
12.98%
5.15%
35-44
14.50%
6.90%
25-34
15.56%
7.13%
18-24
10.76%
4.33%
Source: Finder sample of 855 visitors using demographics data from Google Analytics
How to buy physical gold in Canada
Buying and storing physical gold allows you to get your hands on a tangible asset and avoid the risks associated with the stock market.
If you decide to buy physical gold, you’ll need to consider what form you’d like to acquire. You can buy gold bullion in the form of gold bars or in coins:
Bars: These are larger and therefore more expensive, but they are an effective option if you’re looking to make a sizeable investment.
Coins: These smaller and less valuable, so they can be a more convenient option when you need to liquidate some of your investment or you have less money to invest with.
At most institutions, there is a limit to how much gold you can purchase daily. For instance, most banks have a daily limit of around $10,000 worth of gold, but this can vary. Whether you are a customer or not may also influence your daily purchase limit and even purchase price.
Gold bars generally range in size from 1/10oz (ounces) to 1kg, but there are bars of up to 500oz available. Remember that precious metals use troy ounces and that one troy ounce equals 31.1 grams.
There are 2 types of gold bars: cast bars and minted bars. Cast bars are produced by pouring molten gold into an ingot mould, while minted gold bars are manufactured via a minting or stamping process.
Cast bars are cheaper to produce, but minted bars look better and are generally easier to sell.
Mints around the world also produce gold bullion coins. Typically smaller than bars and ingots, they’re generally considered to be a more convenient option for many investors.
Not only are they cheaper to buy, but they also make it easier to liquidate a small portion of your investment when you need cash. Coins contain between 1/20oz and 1oz of pure gold. A 1/20oz coin with cost you less than $200, making it a more cost-effective way to gain exposure.
These coins also have a nominal monetary value and can be accepted as legal tender in the country where they’re made – examples include the Australian Kangaroo, the American Gold Eagle, the Canadian Maple Leaf and the UK’s Gold Sovereign.
Compare Canadian gold bullion dealers
Gold bullion refers to gold that is at least 99.5% pure and has been transformed into bars or ingots or minted into coins. Gold bullion is the form in which gold is traded on commodities markets around the world.
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How to buy gold stocks in Canada
You can invest in gold stocks to profit from gold prices rather than physically owning gold. With this approach, you don’t actually buy any gold. Instead, you invest in the performance of the gold industry or the mining company.
Stock market investors can buy shares in companies that have gold exposure, such as gold miners, or they can buy units in a gold-themed exchange traded fund (ETF).
Buying gold stocks or ETFs means you don’t have to go through the hassle of buying, storing and insuring it. When you buy shares of a gold mining company, that company is responsible for the mining and storing of gold, and you become a share owner of the company itself. However, because you don’t own any actual gold, it exposes you to all the usual risks that the stock market carries (market volatility, company bankruptcy and the possibility of losing your investment, etc.).
How to buy gold ETFs in Canada
When you buy units in a gold-themed ETF, you’re tracking the price movements of the commodity itself or stocks in multiple companies with gold exposure. See examples of gold-themed ETFs listed below:
Sprott Physical Gold Trust (TSX: PHYS)
Created in February 2010, the Sprott Physical Gold Trust is a closed-end trust that invests in unencumbered and fully-allocated London Good Delivery (LGD) gold bars.
The iShares Gold Trust was launched in 2005 and seeks to reflect the performance of the price of gold using the London Bullion Market Association (LBMA) Gold Price as a benchmark.
Created in 2004, the SPDR Gold Shares ETF and is the largest physically backed gold ETF in the world. Shares in the fund represent units of fractional undivided beneficial interest in, and ownership of, the SPDR Gold Trust.
Royal Canadian Mint – Canadian Gold Reserves (TSX: MNT)
Created in 2012, the Canadian Gold Reserves fund offers Exchange-Traded Receipts (ETRs) that represent an undivided beneficial interest in gold bullion held in custody by the Mint but owned by ETR holders.
Unlike an ETF, which lets you invest in gold-related companies and interests, this ETR lets you actually own physical gold. Instead of storing it yourself, though, the gold is stored by the Mint.
An alternative to buying gold stocks or units in an ETF is to speculate on price movements through CFD investing in the futures market. CFD investors seek to profit from bond price movements – whether up or down. That means that even if gold prices are falling, CFD investors can still make a profit. However, because CFDs can be highly risky and are complex derivative products, gold CFDs are better suited to advanced traders. You can read more about CFDs in our detailed guide.
Compare Gold CFD providers
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Where to buy physical gold and gold bars in Canada
How do you find the best place to buy gold in Canada? There are several options to consider when choosing where to buy gold in Canada, so make sure to consider the following factors before deciding where to buy:
Location. There are a number of gold dealers around Canada, so the location of those dealers will influence your decision if you plan on buying gold in person. Check out Bullion Directory to find a gold bullion dealer in your province.
Online options. There are also many online dealers that allow you to conveniently buy gold bullion online. As well as specialist dealers, you can also buy gold through marketplaces such as eBay and even arrange purchases through precious metal forums. However, as is always the case when spending money online, you’ll need to make sure you know who you’re dealing with – do some research to find out whether the seller is reputable and trustworthy.
How the gold was produced. You’ll also need to find out where the dealer gets their gold from. Is it refined and produced by an established and recognized manufacturer?
Bullion DNA (for gold and silver maple leaf 1 oz coins). The Bullion DNA technology prevents counterfeiting by scanning and detecting the authenticity of Gold Maple Leaf 1 oz coins dated 2014 and onwards and Silver Maple Leaf 1 oz coins dated 2015 and onwards. If you’re interested in buying these types of assets, look for a registered Bullion DNA dealer.
Premiums and commissions. Read the fine print to find out what fees the dealer charges. Expect to pay a commission to the dealer, which is usually folded into the purchase price, as well as an assay fee to check the purity of the gold and to verify its authenticity, but shop around for the best value.
Compare price to Canadian gold price. Gold prices are commonly quoted in US dollars, so make sure you compare the price offered by a dealer with the current price of gold in Canadian dollars.
Delivery. Find out how and when the gold will be transported to you or to its place of storage. Is it insured if anything goes wrong during the delivery process?
Thinking of buying physical gold? Consider the pros and cons first
Pros
Protect your wealth. Gold has long been seen as a reliable store of value that is largely unaffected by the factors that influence other investments. For example, when share prices plummet, the price of gold usually rises as investors look for somewhere “safe” to park their money.
Diversify your portfolio. Gold’s “safe haven” status also makes it well worth considering if you’re looking to diversify your investment portfolio and protect your overall financial position during periods of market downturn.
Easy to buy. There are many dealers who specialize in buying and selling gold, so getting your hands on this precious metal may be easier than you think.
Tangible asset. If global financial systems were to somehow collapse, such as what happened during the Great Depression, owning gold as a physical asset offers financial protection. Gold also can’t be destroyed by fire or water damage and won’t corrode over time.
Liquid. Gold is fairly easy to convert to cash whenever you need to do so. However, it can be easier to sell a gold stock or ETF than it is to sell a bar of gold.
Cons
Long-term returns may be lower. Gold is commonly seen as a steady investment, so it may not offer the same potential for big returns as other investments.
Other fees to consider. You’ll need to factor additional costs such as dealer fees, delivery, storage, security and insurance into your calculations.
Not as convenient as ETFs. ETFs offer a simple and cost-effective way to gain exposure to gold and may be a more convenient option than buying physical gold for many people.
No ongoing income. Unlike owning property or shares, which can both provide an ongoing source of income in the form of rent and dividends respectively, gold doesn’t provide regular income.
Like silver, gold is considered a stable investment that retains its value. Before you invest in gold, you’ll want to consider whether you want to buy, store and insure physical gold, invest in gold on the stock market, or use CFDs to trade gold. Regardless of how you choose to invest in gold in Canada, remember that, like all investments, it carries risk.
How to buy gold in Canada FAQs
Once you've purchased your gold, you'll also need to find a safe place to store it. There are several options to consider, including the following:
Bullion dealers. Many gold dealers will also offer a storage service where you can keep your gold bars or coins for a fee, so ask about the storage options available when you make your purchase.
Safety deposit boxes. You can rent a safety deposit box at a bank to securely store your gold bullion.
Secure vault storage. For high-level security, you may want to research vault storage companies near you and the storage options they offer.
At home. You can also choose to store your gold at home. This obviously may not be as secure as some other options, so you may want to get a home safe installed. You'll also need to update your home and contents insurance to make sure your precious metal is covered by your policy.
Some banks do sell gold to customers, but many do not. Canada's Big 5 banks – TD Canada Trust, CIBC, BMO, RBC and Scotiabank – all sell gold and other precious metals. If you're interested in buying from a bank, talk a local bank representative to find out what your options are, and make sure your investment comes with a secure way of storing your precious metals. You're also more likely to get a better price if you are a customer of the bank you're buying gold from.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.
Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
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