Canadians have four main ways to own gold: an ETF, physical coins or bars, mining stocks, or a certificate from a bank. Each one trades off cost, convenience and how closely it follows the gold price.
1. Gold ETFs
A gold ETF holds bullion in a vault and trades like a stock. You can buy it in a TFSA, RRSP or FHSA through any online broker. Canadian-listed options include funds that hold physical gold and are priced in Canadian dollars, so you avoid conversion fees. Yearly fees run roughly 0.2% to 0.6%. This is the easiest route for most investors, and it is the one that follows the gold price most closely.
2. Coins and bars
The Royal Canadian Mint sells Maple Leaf coins, and dealers sell bars from one gram to one kilogram. You pay a premium over the spot price, usually a few percent on larger bars and more on small coins, and you may take a small haircut when you sell. You also need somewhere safe to keep it, such as a home safe or a bank safety deposit box. Physical gold suits people who want to hold the metal, not people who want to trade it.
3. Gold mining stocks and ETFs
Canada is home to many of the world’s gold miners. Their shares often rise more than gold when the price climbs and fall more when it drops, because mining costs are mostly fixed. A miners ETF spreads that risk across many companies. This is a bet on the industry as much as on the metal.
4. Bank gold certificates and accounts
Some banks sell gold certificates or accounts that represent metal held for you. They avoid storage, but fees and the minimum purchase vary, and they are less flexible than an ETF.
Taxes in Canada
Gold held outside a registered account is taxed as a capital gain when you sell for a profit. Investment-grade bullion of at least 99.5% purity is exempt from GST/HST, but jewellery and lower-purity items are not. Inside a TFSA, gains are tax-free, which is one reason a gold ETF in a TFSA is popular.
How much gold to own
Many advisors suggest keeping gold to a small slice of a portfolio, often 5% to 10%, as a hedge rather than a core holding. Gold pays no interest or dividends, so its only return is a change in price.
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Frequently asked questions
Is it better to buy gold coins or an ETF?
An ETF is cheaper and easier to buy and sell. Coins make sense if you want to hold the metal yourself.
Can I buy gold in a TFSA?
Yes, through a gold ETF or gold stocks. Physical coins cannot go in a TFSA.
Where do I buy gold coins in Canada?
The Royal Canadian Mint, major banks and established bullion dealers. Compare the premium over spot before buying.
This is general information, not investment or tax advice. Discuss gold with other members on the $GOLD page in the Smart Money Watch community.
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