That, along with the concern of a stock-market crash, has prompted quite a lot of Canadians who by no means thought-about proudly owning the dear metallic earlier than to wonder if this age-old asset needs to be a part of their portfolios. In spite of everything, Canada’s largest robo-advisor, Wealthsimple, allocates 2.5% of its shoppers’ accounts to gold—and 10% in its halal portfolios.
Ought to it’s a part of yours? Or would you simply be shopping for in on the peak? There’s no method to know, besides in hindsight. There’ll all the time be “gold bugs” on the market urging you to promote every part and purchase gold earlier than the world goes to pot. Their recommendation is finest prevented.
Right here as a substitute are some essential information round investing in gold that can assist you to make a better-informed determination.
Why is gold so valued?
Gold is used for a variety of merchandise—comparable to jewelry, dental fillings and electronics—however most of it’s merely saved in vaults, within the type of gold bars. Like cash itself or cryptocurrency, gold is effective as a result of folks have determined it’s. However not like the opposite two, it’s resistant to manipulation.
As of early 2025, all of the refined gold on this planet, an estimated 216,265 tonnes, was value a staggering USD$21.5 trillion. Mines around the globe poured one other 3,661 tonnes in 2024. So, the provision of gold is rising, however slowly. And there’s little anybody can do to alter that.
Why do buyers purchase gold in Canada?
As an funding, gold is classed as a commodity. That’s, it’s a standardized and graded substance that trades globally. However not like, say, soybeans or Brent crude oil, you possibly can retailer a significant quantity of gold in your jewelry drawer or secure deposit field. It’s additionally uniquely non-perishable; a part of its enchantment in historical instances was the very fact it didn’t corrode like different metals. So, you possibly can maintain it indefinitely.
For those who personal gold as an funding, it received’t generate any earnings; it’ll simply go up and down in worth in response to provide and demand. Over the very long run, its value tends to trace the speed of inflation.
Most significantly, gold has a historical past as a retailer of worth and unit of alternate. Many central banks nonetheless maintain it to assist stabilize their currencies. In growing nations like India and China, many individuals think about it extra reliable than paper or digital cash. For this reason it continues to carry a privileged place in funding portfolios.