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Here's how to buy gold in all of its forms from gold stocks, gold ETFs, gold bars, gold coins and more
In this article, we’ll look at how to invest in gold and whether you should include gold in a diversified portfolio — or not.
10 reasons to invest in gold (or not)
Pros
- Hedge against inflation. Gold maintains its value when inflation erodes the purchasing power of paper currencies.
- Diversification. Gold can balance a portfolio, moving differently from stocks and bonds and reducing overall risk.
- Safe haven asset. In times of political or economic instability, gold retains value when other assets drop.
- Liquidity. Gold is easy to buy, sell, or trade worldwide. Whether in physical form or ETFs, it’s a highly liquid asset.
- No counterparty risk. Owning physical gold means no dependency on a third party to uphold its value like a stock.
- Long-term growth potential. Over decades, gold has consistently increased in value, (though slower than stocks).
- Global demand. Gold is valued across cultures for jewelry, technology, and as an investment.
- Wealth preservation. It's a tangible asset that has preserved wealth for centuries, even during currency collapses.
- Portfolio insurance. Use gold as an insurance policy, cushioning your investments during market crises.
- Limited supply. Gold mining is slow and costly. Supply is limited which helps maintain its value over time.
Cons
- No passive income. Unlike stocks or real estate, gold doesn’t pay dividends or generate rental income.
- Storage costs. Physical gold requires secure storage, which can eat into your returns.
- Volatility. Gold prices can swing wildly in the short term, which might not suit all investors.
- Opportunity cost. Money tied up in gold could potentially earn higher returns in stocks or other assets.
- No industrial use advantage. Gold's industrial use is limited, making its value heavily sentiment-driven.
- Tax implications. Depending on your country, selling gold might result in high capital gains taxes.
- Market timing challenges. Predicting when to buy or sell gold is notoriously difficult, especially for novice investors.
- Low historical returns. Over long periods, gold tends to underperform equities and other growth investments.
- Speculative investment. Gold is often driven by fear and speculation, leading to irrational price movements.
- Environmental concerns. Gold mining is energy-intensive (bad for the environment) and may conflict with ESG values.
While gold is known as a good store of value, it is also considered to be a speculative and highly volatile investment. Unlike stocks or real estate, gold doesn’t produce income. Its future value is tied to price speculation rather than earnings or dividends.
Still, gold investors have made a mint over two decades, with an annual average return of 9.7% from 2000 to 2020.
Over the past five years, from January 2020 to January 2025, gold has delivered a substantial return on investment (ROI). On January 1, 2020, gold was priced at approximately $1,518.40 per ounce1. By January 1, 2025, the price had risen to around $2,623.96 per ounce2.
This indicates that physical gold appreciated by approximately 72.77% over the five-year period. This growth reflects gold's role as a hedge against inflation and economic uncertainty, factors that have influenced its price trajectory during this time.
However, in the last year, due to high inflation and geopolitical uncertainty, analysts have been cautious about the outlook for the gold market. Still, gold is considered a safe investment and acts as a safety net when markets are volatile.
Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.
Warren Buffett
How to invest in gold in Canada
There are several direct and indirect ways for investors to invest in gold in Canada.
- You can buy gold stocks – the companies that mine gold.
- You can buy a gold ETF that tracks the price of gold.
- You can take physical ownership of gold through coins, bars, or bullion.
The best way to start investing in gold stocks or ETFs is to open a discount brokerage account because you can monitor your investments easily and save money on commission and trading fees. I recommend going with CIBC Investor's Edge, Questrade, or Wealthsimple Trade.
| CIBC Investor's Edge review | Questrade review | Wealthsimple review |
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◦ In-depth research to boost your investment knowledge.
◦ Investment options for every investor, no matter what your financial goals are. ◦ Under 25? Trade for free. |
◦ Buy any North American-listed ETF, including crypto ETFs, commission-free.
◦ No maximum on the amount of free ETFs you can buy. ◦ No minimum investment amount required on ETF orders. |
◦ No account minimums
◦ $0 commission ETF trading ◦ Reinvest dividends automatically |
Let’s take a closer look at how to add gold to your portfolio through these various investments.
Related: Best online brokers in Canada
Canada is rich in resources, so it’s no surprise that gold mining companies make up a large portion of the Canadian stock market.
The advantage here is that if the price of gold falls, mining companies can often shift focus to another metal.
The disadvantage is that mining stocks can decline alongside the rest of the market, even when the price of gold is steady. If stock analysts don't like a company’s financials, the quality of its management team or future production prospects, investors may punish its stock price.
Here are some of the the top gold stocks listed on the S&P/TSX 60:
- Newmont Corporation (NYSE: NEM, TSX: NGT) is the world's largest gold mining company, with operations spanning North and South America, Australia, and Africa. Known for its strong production capacity and commitment to sustainability, Newmont offers exposure to gold prices and operates with a focus on generating long-term shareholder value.
- Barrick Gold Corporation (NYSE: GOLD, TSX: ABX) is one of the world's largest gold producers, with a diversified portfolio of assets across North America, South America, Africa, and the Middle East. Renowned for its operational efficiency and focus on generating shareholder returns, Barrick emphasizes innovation and sustainability in mining.
- Franco-Nevada Corporation (NYSE: FNV, TSX: FNV) is a leading royalty and streaming company with interests in gold, silver, and other precious metals across global mining operations. With its asset-light business model, Franco-Nevada offers consistent cash flow and a low-risk investment option for exposure to the mining sector.
- Agnico Eagle Mines Limited (NYSE: AEM, TSX: AEM) is a premier Canadian gold producer with a focus on safe, responsible mining across operations in Canada, Finland, Mexico, and Australia. Known for its strong production growth and disciplined financial management, Agnico Eagle delivers consistent value to shareholders.
- Kirkland Lake Discoveries Corporation (TSXV: KLDC.V) is a rising star in the gold exploration and mining sector, leveraging its strategic operations in Canada’s Kirkland Lake region. With a focus on innovative exploration techniques and high-grade gold assets, the company is well-positioned for long-term growth in the mining industry.
Here are these top 5 gold stocks with up to date analysis on each.
In theory, it should be expected that the profits and stock prices of these individual gold mining companies should rise and fall with the price of gold. But that’s not always the case when picking individual stocks.
Despite a deep downturn earlier this year, Newmont Corp. has been able to hold on to a top spot in gold stocks. Similarly, for the past year, Barrick Gold Corp. has managed to remain a major dividend-paying stock. Keep that in mind as you make your gold stock picks.
Gold ETFs can be a better way to get broad exposure to gold without the risk of investing in individual companies. Some gold ETFs are backed by physical gold (bullion) stored in vaults, others track gold futures, and some invest directly in the companies that mine the precious metal.
- SPDR Gold Trust (NYSEARCA: GLD) is one of the largest and most liquid gold ETFs, designed to closely track the performance of gold bullion prices. It offers a straightforward way to invest in physical gold, with low management fees and high trading volumes making it a popular choice for investors seeking direct exposure to gold.
- iShares Gold Bullion ETF (TSX: CGL) provides Canadian investors with exposure to the price of gold through direct ownership of physical gold. With low-cost management and a focus on holding bullion in Canadian dollars, it’s a convenient option for those looking to hedge against inflation and currency fluctuations.
- Horizons Gold ETF (TSX: HUG) offers direct exposure to the price of gold, seeking to replicate the performance of the Solactive Gold Front Month MD Rolling Futures Index. It’s ideal for investors who prefer to gain exposure to gold futures contracts without directly trading futures themselves. Any U.S. dollar gains or losses will be hedged back to Canadian dollars, which is important because it offers no protection for Canadian investors against a falling U.S. currency.
- iShares S&P/TSX Global Gold Index ETF (TSX: XGD) invests in a portfolio of gold mining companies globally, offering exposure to both gold prices and the operational performance of miners. It’s an excellent choice for those looking to diversify within the gold sector while benefiting from dividend-paying stocks. With an MER of 0.61%, XGD looks like a solid alternative to speculating on individual gold mining companies.
- VanEck Gold Miners ETF (NYSEARCA: GDX) provides exposure to a global portfolio of gold mining companies, focusing on large-cap miners. It’s a top choice for investors looking for leveraged exposure to gold prices, as mining stocks often amplify movements in the underlying commodity. GDX is well-regarded for its liquidity and diversified holdings in the sector.
Investors should also know that by purchasing a Canadian index fund or ETF, they automatically get exposure to gold in their portfolios. Doing so reduces the risk of trying to pick a winning gold stock.
Related: Best ETFs in Canada & How to buy ETFs
Investors can also get exposure to gold by purchasing and storing gold coins directly.
The Canadian Gold Maple Leaf is a gold coin produced annually by the Royal Canadian Mint. The gold coin is legal tender with a face value of $50 CAD.
The Mint produces several 99.99% pure gold coins ranging from one gram to one ounce.
A golden story
In 2007, the Mint produced the world’s first $1M coin, the "Big Maple Leaf", which weighed 100 kilograms and had a metal value of over $3.5M. The coin's gold content was valued at over $2 million USD3. By March 2017, the market value of a single Big Maple Leaf had reached approximately $4 million USD4.
Given the appreciation in gold prices since then, the current value of the coin's gold content would be significantly higher. Today, with gold prices at approximately $2,623.96 per ounce, the intrinsic metal value of the coin would be around $8.44 million USD.
Image source: https://www.dw.com/en/four-on-trial-for-theft-of-big-maple-leaf-coin-from-berlin-museum/a-47023672
Why it might not be smart to buy physical gold
The "Big Maple Leaf" coin was stolen from Berlin's Bode Museum in March 2017. The coin has not been recovered and is believed to have been melted down and sold5. In February 2020, two cousins, Ahmed and Wissam Remmo, along with their friend Denis W., were convicted and sentenced to several years in prison for the theft.
Unless you have a safe and a strong home insurance policy with the contents insurance covering your gold items, buying physical gold can be risky.
The most traditional way to invest in gold is by purchasing gold bullion, which can be either traditional gold bars or gold coins. You can get gold bars in various weights and sizes, ranging from one gram to 400 ounces. In Canada, investors can buy gold bars online through TD & CIBC Precious Metals or in branches at CIBC that add a premium over the spot price to cover manufacturing, distribution and operational costs.
As of the writing of this article, the spot price for one troy ounce of gold in Canada is approximately $3,900 CAD. Gold and other precious metals are exempt from GST and HST. Be sure to compare prices from multiple reputable dealers.
Aside from bullion, you can also buy gold in the form of jewellery. Unlike coins or bullion, jewellery can have artistic or sentimental value, so it isn’t only a financial investment but a personal one, too, with a more utilitarian value. Not only that, but gold jewellery that you have on hand can come in handy if you’re ever in a bind and need to sell it for some cash. But, when purchasing gold jewellery, make sure you do your research to know what karat gold you’re buying since that can affect the value and that you’re purchasing from a reputable vendor.
Gold futures are complicated. They're contracts in which you agree to buy a set amount of gold at a specific price some time in the future.
Traders can strategically buy and sell futures contracts to profit from the changing price of gold. Buyers of futures contracts profit when commodity prices rise. Sellers of futures contracts profit when commodity prices fall.
The contracts typically require a minimum purchase of 100 ounces of gold. Novice investors should exercise extreme caution with futures contracts due to the high degree of borrowing typically involved.
History of gold prices in Canada
The history of gold prices as an investment dates back to the 1970s when the U.S. and other countries abandoned the gold standard monetary policy and let the price of gold fluctuate in the private market.
The price shot up from less than $200 per ounce to more than $850 per ounce by 1980. From there, the price of gold collapsed and rarely crossed the $400 per ounce mark until 2005, when it began a strong upward trajectory and reached an all-time high of $1,889.70 per ounce in 2011.
Gold prices have been largely disappointing since then as stocks around the world entered a raging bull market for the past 10 years. Since 2010, the S&P 500 has gained 250%, while gold has increased by just 50%.
But that trend started changing thanks to the global coronavirus pandemic. By 2020, the price of gold was up 23.61%, while the S&P 500 was up 16.26%.
Risk and rewards of investing in gold
✅ Diversified investors look for ways to build their portfolios with non-correlated assets—investments that don’t move in tandem. That way, when one asset class declines, another either rises or remains stable, reducing overall losses during market downturns.
✅ Gold fits this bill. During times of market volatility, such as the early months of the COVID-19 pandemic in 2020, stocks plunged by 30% in a month while gold prices surged, reinforcing its reputation as a "safe haven" asset.
❌ But gold has its risks. It doesn’t produce income like stocks or bonds, and its price is driven by speculation rather than fundamentals. Gold can be highly volatile, with prices swinging significantly—potentially falling below $1,500 CAD or spiking above $2,500 CAD depending on market sentiment.
❌ Owning physical gold may sound appealing, but it’s not without challenges. Physical gold bars, coins, or certificates are at risk of being lost, damaged, or stolen. Secure storage adds costs, and keeping gold in your home is far from practical.
✅ Speculating on individual gold mining companies, especially junior miners without a proven track record, carries even greater risk. It’s wiser to gain exposure through low-cost gold ETFs, which track the spot price and store gold securely in vaults.
✅ If individual stocks tempt you, focus on well-established names like Barrick Gold or Agnico Eagle Mines with strong operational histories.
✅ That said, gold’s strong performance over the past two decades highlights its value as part of a diversified portfolio. The key question is how much to allocate—many advisors suggest keeping gold exposure between 5% and 10% of your total investments, depending on your financial goals and risk tolerance.
Related: How to start investing in Canada & Investing basics
When should you invest in gold?
Investors should dedicate a portion of their portfolio to gold if they believe that gold is a non-correlated asset to stocks and that it also provides a hedge against inflation and currency weakness. Adding gold to your portfolio during periods of uncertainty can make a lot of sense for any diversified investor.
Gold makes up 7.5% of Ray Dalio’s famous All-Weather Portfolio. He does this through the ETF GLD. When you consider gold’s relationship to stocks, inflation, and currency, this percentage sounds about right.
What is gold even worth?
Going back to a Warren Buffett example about investing in gold, the Oracle of Omaha explained that the world’s gold stock was worth about $9.6 trillion U.S. dollars.
For that amount of money, Buffett explained, you could buy all of the cropland in the United States – 400 million acres with roughly $200 billion of annual output – and 16 Exxon Mobils – each one earning $40 billion annually. Still, after buying those assets, there are $1 trillion U.S. dollars in cash left over.
A century from now, the 400 million acres of farmland will have produced massive output. Exxon will have produced trillions of dollars in profits for shareholders while also growing its assets to be worth many more trillions.
The gold, on the other hand, will have remained unchanged in size and will still be unable to produce anything.
You can fondle the gold, but it will not respond.
Warren Buffet
Should I be investing in gold today?
Some argue commodities like gold and silver are too risky and don't offer enough utility as investments, while others argue they can help round out a diversified long-term portfolio.
There are also many views about the future of investing in gold. Gold ‘bears’ are skeptical and always see a gold bubble about to burst. This makes sense when you look back at the boom and bust nature of gold prices over the past 50 years. Gold ‘bulls’ believe gold is a safe haven and worth holding in any diversified portfolio.
Many people rush to gold in tough times. The shiny metal has been valuable since the dawn of recorded history and tends to hold up well during stock market dips and periods of high inflation.
I have no views as to where (gold) will be (in the next five years), but the one thing I can tell you is it won’t do anything between now and then except look at you
Warren Buffet to CNBC in 2009
Buffett shocked his followers in 2020 when his company Berkshire Hathaway actually picked up shares of gold mining company Barrick Gold — but he sold them the following year.
Is investing in gold for you?
Before you go King Midas and turn your entire portfolio to gold, take the following precautionary steps:
- Decide your risk tolerance: Investing in gold futures can be risky, while ETFs can help spread out your risk.
- Do your research: If you decide to invest in a specific gold mining company, look into its performance over the last few years and whether it mines for other metals or resources.
- Start slow: Most people who invest in gold make it a small part of a diversified portfolio.
And remember, if you're just starting out as an investor, it's not a bad idea to look into some low-stakes alternatives.
Robb Engen
Author
Robb Engen is a leading expert in the personal finance realm of Canada and is also the co-founder of Boomer & Echo, an award-winning personal finance blog.
Tyler Wade
Personal finance content strategist & writer
Tyler Wade has worked in personal finance for over 5 years writing for brands like Ratehub, Forbes, KOHO, and now Money.ca.
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