In 2023, more Canadians than ever are looking to gold and other precious metals to protect and diversify their investment portfolios due to economic uncertainty.
With bank failures, geopolitical tension, and crises casting doubt on the economy, not to mention inflation eroding the value of the Canadian dollar, it’s no wonder why everyone from ordinary investors to central bankers is stockpiling gold at record rates—to the tune of 4,741 tonnes last year alone.
The yellow metal has generally performed well under bouts of economic and geopolitical turmoil. Take last year, for example, when gold demand hit a decade-high and increased in value following the Russian invasion of Ukraine. All the while, the stock market fell and remains volatile today.
As a hard asset, gold remains an excellent inflation hedge and often provides crucial diversification benefits to a traditional stock and bond-heavy portfolio.
Basically, gold acts like an “insurance policy” against drops in the stock market and the Canadian dollar.
But, if you’re looking to buy gold in Canada, don’t make the leap without first doing your homework. While gold can be an excellent investment, it has its own risks, so we recommend you always speak to your financial advisor before making any investment decision.
For those considering buying gold in Canada, we put together this informational guide to help you arrive at a fully informed decision.
Central Bank & Institutional Buying Frenzy
Earlier this year, CNBC reported that central banks across the world purchased gold at record-high numbers in 2022.
The World Gold Council announced that central banks added a whooping 1,136 tonnes of gold to their reserves in 2022. This is the largest amount purchased by central banks in a single year since 1950. Are banks smelling blood in the markets?
Here’s the current leaderboard of central bank gold holdings per country:
- United States — 8,133 tonnes.
- Germany — 3,359 tonnes.
- Italy — 2,452 tonnes.
- France — 2,436 tonnes.
- Russia — 2,299 tonnes.
- China — 1,948 tonnes.
- Switzerland — 1,040 tonnes.
But it’s not just central banks that have an appetite for gold. Institutional investors and high-net-worth (HNW) individuals have also been net buyers of the yellow metal.
The “Whales” Betting on Gold?
Some of the wealthiest Canadians are leaning on gold to protect their savings and shore up their financial positions amid high inflation and economic uncertainty.
Take Kevin O’Leary, the famous Canadian investor and host of the hit ABC television show Shark Tank. O’Leary has publicly stated on a YouTube show that he likes to keep 5% of his portfolio allocated to gold, with annual rebalancing. He has a strong preference for owning physical gold rather than investing in mining stocks.
Many other HNW investors have been outspoken about their gold allocation, including Ray Dalio, Paul Tudor Jones, Kyle Bass, Stanley Druckenmiller, and many more.
Ray Dalio’s famous “All Weather Portfolio” has an 8% gold allocation. Likewise, Stanley Druckenmiller recommended investors hold gold as a hedge against inflation and has stated that he has a “very large” position in gold, although he has not disclosed the specifics of his allocation.
Gold as an “Insurance Policy”
There’s no denying that inflation in Canada is high, and that the economic situation is uncertain. Successful investors like Kevin O’Leary and Ray Dalio understand that inflation is, for better or worse, a natural part of modern markets. They employ tools such as gold to mitigate the effects of inflation and economic crises on their wealth.
Gold has historically been used to preserve wealth, protect purchasing power, and hedge against runaway inflation. With these benefits in mind, it makes sense why so many wealthy investors recommend holding at least some of your wealth in the metal.
To find out how inflation is impacting your savings over time, check out this inflation calculator tool. Then, compare your result with the price of gold over the same period.
How Can Canadians Buy Gold? (Comparison table)
There are several ways to invest in gold for Canadians that are interested in getting exposure to this asset class in their portfolios. These include:
- Gold ETFs: Exchange-traded funds (ETFs) are funds that track the price of gold and can be bought and sold like stocks. GLD is one of the most popular gold ETFs. SLV is the equivalent ETF for silver. This is an easy way to gain exposure to gold in your portfolio. However, it may not offer all the benefits of physical gold ownership.
- Futures contracts: Investors can also buy gold futures contracts, which are agreements to buy or sell gold at a future date at a predetermined price. This method is more complex and requires knowledge of the commodities market.
- Mining stocks: Canadians can also invest in gold mining stocks, which are shares in companies that mine gold. Many of the largest gold companies in the world, like Barrick Gold, are based in Canada. These stocks can be bought and sold on Canadian stock exchanges. Although buying stocks doesn’t provide you with the same advantages as investing in physical gold, it can be an easy way to get exposure to the price of gold.
- Gold mutual funds: Similar to gold ETFs, mutual funds are pools of money managed by professionals that invest in a portfolio of gold-related securities, including gold mining stocks and physical gold.
- Gold certificates: Gold certificates are documents that represent ownership of physical gold held by a bank or other financial institution. These certificates can be bought and sold like stocks.
- Gold savings accounts: Some banks and financial institutions offer gold savings accounts, which allow investors to save and invest in gold over time. These accounts may offer different levels of risk and return depending on the type of investment.
- Gold RRSP & TFSA Accounts: Canadian investors can invest in physical gold through retirement accounts that allow for the purchase of physical gold bullion bars and coins. Accounts such as a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA) have qualified for such investments since 2005. This may be the most tax-efficient and price-efficient way to own gold, as it gives Canadian investors the ability to benefit from tax efficiency. Silver Gold Bull, one of North America’s top-ranked gold investment providers, has a specialized gold investing program specifically for Canadian retirees.
- Local gold dealers: for smaller physical purchases, there are always local businesses that sell gold, such as coin stores and pawnshops. These businesses can be found online as well. Buying from such dealers is a great way to buy small quantities of gold to hold at home, but it’s not the most price-efficient way to invest large amounts of money in gold.
Different Types of Physical Gold
Gold Bullion Bars
Gold bars are rectangular blocks of gold that come in different sizes and weights. They are typically produced by government mints like the Royal Canadian Mint or the US Mint.
Bullion bars can also be produced by private refineries and are usually sold at a premium to the current spot price of gold. Gold bars are the most price-efficient way to own physical gold, as they generally come at lower premiums than coins.
Gold Bullion Coins
Gold bullion coins are also a popular form of physical gold investment. They are considered legal tender and have a face value recognized by the government. Just like gold bars, coins are usually minted by government mints and come in various sizes and weights.
Some popular gold coins in Canada include the Canadian Gold Maple Leaf and the American Gold Eagle. Bullion coins come with various designs and are meant to look more visually attractive than gold bars, which also means they have a higher price per ounce.
Gold Rounds
Gold rounds are similar to gold bullion coins but are not legal tender and do not have a face value. They are typically produced by private refineries and come in various designs, sizes, and weights.
Numismatic Gold Coins
Numismatic gold coins are rare or historical coins that are valued not only for their gold content but also for their rarity, historical significance, and condition. These coins are typically bought and sold by collectors and carry a higher premium than bullion coins or rounds.
CRA Rules for Gold Investors
If you want to buy gold in Canada, you have to play by the rules. That means there is no escaping the reaches of the Canada Revenue Agency (CRA), which sets numerous restrictions on how Canadians can invest in the yellow metal.
The CRA has specific requirements for gold bullion held as an investment, just like the Internal Revenue Service has similar rules for American investors. Here are some of the key requirements:
Reporting Requirements
If you buy or sell investment-grade gold bullion, which means gold that is not considered a “collectible” by the CRA. If you sell gold products classified as “collectibles” by the CRA, you must report their sale on your tax return.
Capital Gains Tax
If you sell gold bullion for more than you paid for it, you may be subject to capital gains tax. The amount of tax you owe will depend on your income and the length of time you held the gold bullion. If you held the gold bullion for less than a year, the gain is taxed at your marginal tax rate. If you held the gold bullion for more than a year, the gain is taxed at half of your marginal tax rate.
Purity Requirements
To qualify for certain tax exemptions, such as when you invest through an RRSP or TFSA, gold bullion must be at least 99.5% pure. The purity of the gold bullion must be certified by a recognized assay office or national mint.
Storage Requirements
If you hold gold bullion in a self-directed RRSP or TFSA, it must be stored with an approved trustee or custodian, and the trustee or custodian must provide you with a statement of the gold bullion’s purity and weight.
Contribution Limits and Requirements
Whenever you contribute to an RRSP or TFSA, you are subject to contribution limits that restrict the dollar value of the assets you include in these accounts annually. As of 2023, contribution limits for Canadian registered retirement accounts are as follows:
- Registered Retirement Savings Account (RRSP): 18% of the previous year’s earned income, up to $30,780.
- Tax-Free Savings Account (TFSA): Annual contribution limit of $6,500.
It’s important to consult with a tax professional to ensure that you are in compliance with the CRA’s requirements and to understand the tax implications of investing in gold bullion.
The CRA allows Canadians to hold gold bullion, coins, and bars within a retirement account such as an RRSP or TFSA since 2005, but as you can see, there are multiple rules to abide by.
Top-Rated Canadian Gold Dealers for 2023
If you’re a Canadian investor ready to buy gold, we recommend contacting several of the best-rated Canadian gold dealers to shop around for the best deal. This year, the companies listed below are currently the highest rated— each of them boasts perfect security track records, are fully insured, and have excellent customer reviews across the board.
Below, we’ve listed our top picks for Canadian gold companies this year.
#1 - Silver Gold Bull
If you’re ready to buy gold in Canada, the current industry frontrunner is Silver Gold Bull. This Canadian company, with its head office in Calgary, Alberta, has over 300,000 five-star reviews, which goes to show that they have a stellar reputation in Canada.
Silver Gold Bull also has operations in the United States and is currently one of the oldest and most reputable gold and silver dealers in the world, with close to $4 billion in transactions.
They have physical locations in Calgary and Toronto but do most of their business online. As we covered earlier, this company also has a specialized gold investing program for RRSP/TFSA investors interested in buying gold.
Silver Gold Bull PROS 👍
- Dedicated RRSP and TFSA gold-buying accounts
- In-person shopping available at Calgary or Toronto outlets
- 300,000+ verified 5-star customer reviews
- “Best Price Guarantee” on all bullion items
Silver Gold Bull CONS 👎
- Bestselling items quickly go out of stock
- Limited investment options outside of gold and silver products
#2 - Border Gold
Border Gold is a precious metals dealer based in Surrey, British Columbia. They specialize in selling gold, silver, platinum, and palladium bullion products, including coins, bars, and rounds as a direct distributor from the Royal Canadian Mint.
Their website claims they offer competitive pricing on their products and provide storage options for investors. They also offer various payment options, including wire transfer, Interac e-Transfer, and credit card—all of which are offered at low fees.
Unlike Silver Gold Bull, Border Gold doesn’t seem to have a dedicated RRSP/TFSA program for investors. However, Canadian investors can rejoice because all precious metals bullion sold by Border Gold are eligible for inclusion in registered retirement accounts.
Click here to shop for gold, silver, and other precious metals with Border Gold.
Border Gold PROS 👍
- 30 years of experience in the Canadian gold retail market
- Low markups and premiums on bullion and coins (~4%)
- Industry low minimum order requirements ($300)
- Direct distributor from the Royal Canadian Mint
Border Gold CONS 👎
- Very limited platinum and palladium offerings for additional diversification
- Limited in-person retail shopping availability
#3 - Canadian Bullion Services
Canadian Bullion Services is a reputable precious metals dealer based in Toronto, Canada. They specialize in selling gold, silver, platinum, and palladium bullion products, including coins, bars, and rounds. They offer competitive pricing on their products and provide storage options for investors.
They also offer various payment options, including wire transfer, Interac e-Transfer, and credit card. Canadian Bullion Services is known for its secure shipping, with packages typically arriving within 5-10 business days. They also offer a competitive buyback program for customers who want to sell their precious metals back to them.
Click here to browse Canadians Bullion Service’s exclusive gold and silver investing options for Canadian retirement investors.
Canadian Bullion Services PROS 👍
- Exclusive online trading platform available for metals traders
- Seamless integration with Questrade accounts
- All gold holdings in TFSAs/RRSPs are stored in secure Brinks vaults in Ontario
- “A+” Better Business Bureau rating
Canadian Bullion Services CONS 👎
- Some negative customers reviews published online
- Shipping times can be slower than competitors
#4 - Sprott Money
The Toronto-based Sprott Money Ltd. is one of Canada’s finest gold vendors for collectors and retirement investors alike. With Sprott, every gold deposit is stored via their third-party partner, Questrade, using only verified and highly secure vaults.
Once you have opened a brokerage account with Questrade, buying gold or silver from Sprott Money is a relatively seamless process. Sprott and Questrade accounts can be linked through a “dealer authorization form” that makes transacting gold fast and stress-free. The only downside is that transactions must be facilitated in United States dollars.
For all Sprott Money transactions, a $20 per trade fee applies but, fortunately, these fees are waived for any transaction above $2,000. You can sign up here to get started with Sprott.
Sprott Money PROS 👍
- Owned and operated by the family of Canadian investor Eric Sprott
- “No-fee” Questrade integration
- Low fees and transaction costs
- Transparent and proven company leadership team
Sprott Money CONS 👎
- Some items are ineligible for TFSA and RRSP inclusion
- Must be bought and sold in USD
- Account fee structures are non-transparent and subject to change
- Varied customer reviews found online
Still not sold on gold? If you’re interested in seeing more in-depth reviews of popular Canadian gold dealers, the investing education website GoldRRSP has an extensive list of Canadian gold companies that allow you to use an RRSP or TFSA to invest in gold and silver.
Looking to Buy Gold in Canada? Do Your Due Diligence First
For Canadian gold investors, this article is merely the first step in making an investment decision. If you and your financial advisor have decided that gold investing is right for you, there are a couple of next steps we suggest taking.
First, read GoldRRSP’s exclusive guide to buying gold in Canada. There you will find all of the necessary information needed to get started on your gold-buying journey, including the common scams and pitfalls to watch out for before you buy.
Next, consider opening a gold TFSA or RRSP with a trusted service provider. For 2023, we recommend Silver Gold Bull, the top-rated gold investment company in Canada according to over 300,000 verified five-star reviews from real customers.
Silver Gold Bull is the only Canadian gold investment provider with dedicated TFSA and RRSP gold-buying accounts on offer—and with their signature “Best Price Guarantee”, they are the hands-down frontrunner for Canadian shoppers looking for the best deal on their gold.
Request your free Canadian gold investor’s guide
If you would like to learn more about gold buying in Canada, Silver Gold Bull has the perfect guide for investors and RRSP/TFSA account holders interested in adding gold to their portfolio. Get started by requesting your free gold investors’ guide today.
Author: Liam Hunt, MA. Liam has a Master’s degree from Dalhousie University in Halifax, Nova Scotia, Canada. He has extensive experience writing about both Canadian and global politics. He routinely covers various financial topics, such as precious metals, millennial investing, and more. His writing can be found in publications such as The Toronto Star, Forbes, and Barron’s.
Reviewed by: Kelly Kennedy, CMA, CPA, MBA. Kelly has an MBA from Queens University and teaches accounting and finance at a local college in Calgary, Alberta, Canada. He also writes about financial topics for various publications and blogs.
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