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Tag: investing in gold

  • Beyond bullion: Smarter ways for Canadians to invest in gold – MoneySense

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    Images of people lining up at gold dealers around the world have become common again, and Canada is no exception. As early as September 2023, Global News reported a “gold rush” at Costco, where one-ounce gold bars were selling out within hours of being listed online.

    But before giving in to the fear of missing out, it may be worth considering some alternatives to physical gold. Investment case aside, there are several practical reasons why owning bullion directly may not be the best approach for many investors.

    The case against bullion

    This isn’t an argument against owning gold directly. I have a few Gold Maple Leaf coins myself and there’s something almost primal about holding them. The weight, the shine—it taps into an ancient fascination with the metal that no security can replicate.

    But objectively, buying and storing physical bullion has never been the most seamless or efficient way to gain gold exposure.

    The first issue is the bid-ask spread. When you buy from a dealer, you’re not transacting at the spot price you see quoted online. Dealers make their money on the spread between what they sell at and what they’ll buy back for. As of October 17, for example, Vancouver Bullion & Currency Exchange (VBCE) listed one-ounce Gold Maple Leaf coins as follows:

    • VBCE Buy: $5,893 CAD
    • VBCE Sell: $6,068 CAD

    That’s a spread of $175, or about 3%. In other words, gold prices have to rise by at least that much just for you to break even.

    Then there’s the matter of security. I keep mine in a heavy-duty, bolted-down, fireproof safe that wasn’t cheap. Hiding it under a mattress or burying it in the backyard isn’t advisable.

    If you decide to store it at the bank, you’ll pay annual fees for a safety deposit box and, more importantly, reintroduce counterparty risk. The whole point of owning gold is to remove intermediaries, but as soon as it’s sitting in a bank vault, it’s no longer fully in your control.

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    If your top priority is to physically hold your wealth, to have it in your possession, then by all means, buy bullion. There’s nothing wrong with that. Just know it’s not as easy as clicking “buy” on a screen. You have to find a reputable dealer, pay a premium, arrange secure storage, and handle logistics that digital gold holders never have to think about. And since gold produces no income, every expense—from dealer spreads to storage—comes directly out of your total return.

    If your main reason for owning gold is to diversify a portfolio or participate in its price rally—rather than to establish self-custodied reserves as a last-ditch store of value—it’s worth considering other vehicles. Exchange-traded funds (ETFs), closed-end funds (CEFs), and gold mining equities can all provide exposure without the friction, cost, and security headaches of physical bullion.

    Gold ETFs

    Gold exchange-traded funds (ETFs) are open-ended funds that correspond directly to custodied, audited reserves of gold. They benefit from the same in-kind creation and redemption structure used by all ETFs, meaning authorized participants can exchange shares for physical gold (and vice versa).

    This arbitrage mechanism helps keep the ETF’s market price closely aligned with its net asset value (NAV), reducing the risk of persistent premiums or discounts.

    There are plenty of choices from Canadian issuers. The main things to focus on are low management expense ratios (MERs) and tight bid-ask spreads, since both affect total return over time. A good example is the BMO Gold Bullion ETF (ZGLD), which carries a competitive 0.23% MER and holds unencumbered, 400-ounce gold bars in a local BMO vault that’s regularly audited. 

    For investors looking for a low-cost, liquid way to track gold’s spot price, ETFs like this tend to be the most straightforward and accessible route.

    Gold CEFs

    Before ETFs dominated the market, closed-end funds were the go-to security for gold exposure. Unlike ETFs, they don’t create or redeem shares on demand.

    A CEF is issued with a fixed number of shares at its IPO, and afterward, trading takes place only among investors in the open market. Because of that, supply and demand can cause the market price to deviate from NAV, leading to either a discount or premium.

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    Tony Dong, MSc, CETF

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  • Gold price today, Monday, September 15: Gold opens above $3,600 ahead of expected rate cut this week

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    Gold (GC=F) futures opened at $3,680.20 per ounce on Monday, up 0.8% from Friday’s close of $3,649.40. Gold has opened above $3,600 daily since September 9.

    Investors are awaiting the Fed’s next interest rate decision on September 17. A 25-basis-point cut is widely expected, though President Trump told reporters Sunday that he expected “a big cut.” The Fed will also release its dot plot this week, a chart outlining how each Fed committee member predicts interest rates will evolve over the next few years. The dot plot is an indicator of future rate changes, given the information available today. The Fed’s interest-rate decisions are designed to support maximum sustainable employment and low inflation.

    The price of gold typically responds well to lower interest rates.

    The opening price of gold futures on Monday is up 0.8% from Friday’s close of $3,649.40 per ounce. Monday’s opening price is up 2.4% from the opening price of $3,594.50 one week ago on September 8. In the past month, the gold futures price has increased 10% compared to the opening price of $3,346.80 on August 15, 2025. In the past year, gold is up 43.3% from the opening price of $2,568.80 on September 13, 2024.

    24/7 gold price tracking: Don’t forget you can monitor the current price of gold on Yahoo Finance 24 hours a day, seven days a week.

    Want to learn more about the current top-performing companies in the gold industry? Explore a list of the top-performing companies in the gold industry using the Yahoo Finance Screener. You can create your own screeners with over 150 different screening criteria.

    Investing in gold is a four-step process:

    1. Set your goal

    2. Set an allocation

    3. Choose a form

    4. Consider your investment timeline

    The first step to investing in gold is understanding your goals for buying it.

    Given gold’s historic behavior, three suitable investing goals for a gold position are:

    1. Diversification into an asset that moves independently from stock prices

    2. Protection against inflation-related loss of purchase power

    3. Backup source of value and wealth in an unlikely economic collapse

    Gold has long been part of a balanced portfolio given its ability to hold its value – or even increase further – when the value of other assets is falling. That is why investors utilize gold as a stabilizer. Investors rely on gold’s strength in tough times to limit unrealized losses in equities and inflation-related reductions in purchasing power of cash deposits. That’s exactly what we’re seeing play out now before our eyes.

    Gold is also a widely recognized store of value. As such, the precious metal can potentially stand in as a medium of exchange if the dollar collapses.

    “I recommend that everyone buy a little gold as a hedge against calamity,” said Scott Travers, author of The Coin Collector’s Survival Manual and editor of “COINage” magazine, in an interview with Bottom Line, Inc. Gold “should be viewed as an insurance policy,” he said.

    Learn more: How to invest in gold in four steps

    Whether you’re tracking the price of gold since last month or last year, the price-of-gold chart below shows the precious metal’s steady upward climb in value.

    Historically, gold has shown extended up cycles and down cycles. The precious metal was in a growth phase from 2009 to 2011. It then trended down, failing to set a new high for nine years.

    In those lackluster years for gold, your position will negatively impact your overall investment returns. If that feels problematic, a lower allocation percentage is more appropriate. On the other hand, you may be willing to accept gold’s underperforming years so you can benefit more in the good years. In this case, you can target a higher percentage.

    The precious metal has been in the news lately, and many analysts are bullish on gold. In May, Goldman Sachs Research predicted gold would reach $3,700 a troy ounce by year-end 2025. That would equate to a 40% increase for the year, based on gold’s January 2 opening price of $2,633. Rising demand from central banks, along with uncertainty related to changing U.S. tariff policy, are the factors driving the increase.

    If you are interested in learning more about gold’s historical value, Yahoo Finance has been tracking the historical price of gold since 2000.

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  • What is the price of gold in Canada? And more about gold investing – MoneySense

    What is the price of gold in Canada? And more about gold investing – MoneySense

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    That, together with the fear of a stock-market correction, has prompted a lot of Canadians who never considered owning the precious metal before to wonder whether this age-old asset should be part of their portfolios. After all, Canada’s largest robo-advisor, Wealthsimple, allocates 2.5% of its clients’ accounts to gold—and 10% in its halal portfolios.

    Should it be part of yours? Or would you just be buying in at the peak? There’s no way to know, except in hindsight. There will always be “gold bugs” out there urging you to sell everything and buy gold before the world goes to pot. Their advice is best avoided.

    Here instead are some important facts around investing in gold that will help you make a better-informed decision.

    Why is gold so valued?

    Gold is used for a wide range of products—such as jewellery, dental fillings and electronics—but most of it is simply stored in vaults, in the form of gold bars. Like money itself or cryptocurrency, gold is valuable because people have decided it is. But unlike the other two, it’s immune to manipulation.

    As of mid-October, all the refined gold in the world, an estimated 212,582 tonnes, was worth a staggering USD$18.3 trillion. Mines around the world poured another 1,788 tonnes in the first half of 2024. So, the supply of gold is increasing, but slowly. And there’s little anyone can do to change that.

    Why do investors buy gold in Canada?

    As an investment, gold is classified as a commodity. That is, it’s a standardized and graded substance that trades globally. But unlike, say, soybeans or Brent crude oil, you can store a meaningful amount of gold in your jewellery drawer or safe deposit box. It’s also uniquely non-perishable; part of its appeal in ancient times was the fact it didn’t corrode like other metals. So, you can hold it indefinitely.

    If you own gold as an investment, it won’t generate any income; it’ll just go up and down in value according to supply and demand. Over the very long term, its price tends to track the rate of inflation.

    Most importantly, gold has a history as a store of value and unit of exchange. Many central banks still hold it to help stabilize their currencies. In developing countries like India and China, many people consider it more trustworthy than paper or electronic money. This is why it continues to hold a privileged place in investment portfolios.

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    Michael McCullough

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  • Private equity, private debt and more alternative investments: Should you invest? – MoneySense

    Private equity, private debt and more alternative investments: Should you invest? – MoneySense

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    What are private investments?

    “Private investments” is a catch-all term referring to financial assets that do not trade on public stock, bond or derivatives markets. They include private equity, private debt, private real estate pools, venture capital, infrastructure and alternative strategies (a.k.a. hedge funds). Until recently, you had to be an accredited investor, with a certain net worth and income level, for an asset manager or third-party advisor to sell you private investments. For their part, private asset managers typically demanded minimum investments and lock-in periods that deterred all but the rich. But a 2019 rule change that permitted “liquid alternative” mutual funds and other innovations in Canada made private investments accessible to a wider spectrum of investors.

    Why are people talking about private assets?

    The number of investors and the money they have to invest has increased over the years, but the size of the public markets has not kept pace. The number of operating companies (not including exchange-traded funds, or ETFs) trading on the Toronto Stock Exchange actually declined to 712 at the end of 2023 from around 1,200 at the turn of the millennium. The same phenomenon has been noted in most developed markets. U.S. listings have fallen from 8,000 in the late 1990s to approximately 4,300 today. Logically that would make the price of public securities go up, which may have happened. But something else did, too.

    Beginning 30 years ago, big institutional investors such as pension funds, sovereign wealth funds and university endowments started allocating money to private investments instead. On the other side of the table, all manner of investment companies sprang up to package and sell private investments—for example, private equity firms that specialize in buying companies from their founders or on the public markets, making them more profitable, then selling them seven or 10 years later for double or triple the price. The flow of money into private equity has grown 10 times over since the global financial crisis of 2008.

    In the past, companies that needed more capital to grow often had to go public; now, they have the option of staying private, backed by private investors. Many prefer to do so, to avoid the cumbersome and expensive reporting requirements of public companies and the pressure to please shareholders quarter after quarter. So, public companies represent a smaller share of the economy than in the past.

    Raising the urgency, stocks and bonds have become more positively correlated in recent years; in an almost unprecedented event, both asset classes fell in tandem in 2022. Not just pension funds but small investors, too, now worry that they must get exposure to private markets or be left behind.

    What can private investments add to my portfolio?

    There are two main reasons why investors might want private investments in their portfolio:

    • Diversification benefits: Private investments are considered a different asset class than publicly traded securities. Private investments’ returns are not strongly correlated to either the stock or bond market. As such, they help diversify a portfolio and smooth out its ups and downs.
    • Superior returns: According to Bain & Company, private equity has outperformed public equity over each of the past three decades. But findings like this are debatable, not just because Bain itself is a private equity firm but because there are no broad indices measuring the performance of private assets—the evidence is little more than anecdotal—and their track record is short. Some academic studies have concluded that part or all of private investments’ perceived superior performance can be attributed to long holding periods, which is a proven strategy in almost any asset class. Because of their illiquidity, investors must hold them for seven years or more (depending on the investment type).

    What are the drawbacks of private investments?

    Though the barriers to private asset investing have come down somewhat, investors still have to contend with:

    • lliquidity: Traditional private investment funds require a minimum investment period, typically seven to 12 years. Even “evergreen” funds that keep reinvesting (rather than winding down after 10 to 15 years) have restrictions around redemptions, such as how often you can redeem and how much notice you must give.
    • Less regulatory oversight: Private funds are exempt from many of the disclosure requirements of public securities. Having name-brand asset managers can provide some reassurance, but they often charge the highest fees.
    • Short track records: Relatively new asset types—such as private mortgages and private corporate loans—have a limited history and small sample sizes, making due diligence harder compared to researching the stock and bond markets.
    • May not qualify for registered accounts: You can’t hold some kinds of private company shares or general partnership units in a registered retirement savings plan (RRSP), for example.
    • High management fees: Another reason why private investments are proliferating: as discount brokerages, indexing and ETFs drive down costs in traditional asset classes, private investments represent a market where the investment industry can still make fat fees. The hedge fund standard is “two and 20”—a management fee of 2% of assets per year plus 20% of gains over a certain threshold. Even their “liquid alt” cousins in Canada charge 1.25% for management and a 15.7% performance fee on average. Asset managers thus have an interest in packaging and promoting more private asset offerings.

    How can retail investors buy private investments?

    To invest in private investment funds the conventional way, you still have to be an accredited investor—which in Canada means having $1 million in financial assets (minus liabilities), $5 million in total net worth or $200,000 in pre-tax income in each of the past two years ($300,000 for a couple). But for investors of lesser means, there is a growing array of workarounds:

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    Michael McCullough

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  • Why did the stock markets fall? – MoneySense

    Why did the stock markets fall? – MoneySense

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    Anxiety over the U.S. economy

    Despite some signs of cooling, the U.S. economy kept chugging along even with higher rates, outpacing Europe and Asia. Then came last week’s economic reports.

    Weak reports on manufacturing and construction were followed by the government’s monthly report on the job market, which showed a significant slowdown in hiring by U.S. employers. Worries that the U.S. Fed may have kept the brakes on the economy too long spread through the markets.

    Big Tech movements

    A handful of Big Tech stocks drove the market’s double-digit gains into July. But their momentum turned last month on worries investors had taken their prices too high and expectations for their profit gains had grown too difficult to meet—a notion that gained credence when the group’s latest earnings reports were mostly underwhelming.

    Apple fell more than 5% Monday, after Warren Buffett’s Berkshire Hathaway disclosed that it had slashed its ownership stake in the iPhone maker. Nvidia lost more than $420 billion in market value Thursday through Monday. Overall, the tech sector of the S&P 500 was the biggest drag on the market Monday.

    Japan’s rollercoaster

    The Nikkei suffered its worst two-day decline ever, dropping 18.2% on Friday and Monday combined. One catalyst for the outsized move has been an interest rate hike by the Bank of Japan last week.

    The BoJ’s rate increase affected what are known as carry trades. That’s when investors borrow money from a country with low interest rates and a relatively weak currency, like Japan, and invest those funds in places that will yield a high return. The higher interest rates, plus a stronger Japanese yen, may have forced investors to sell stocks to repay those loans.

    What should investors do now?

    The prevailing wisdom is: Hold steady. Experts and analysts encourage taking a long view, especially for investors concerned about retirement savings. “More often than not, panic selling on a red day is generally a great way to lose more money than you save,” said Jacob Channel, senior economist for LendingTree, who reminds investors that markets have recovered from worse sell-offs than the current one.

    Bitcoin was back up to $56,490 Monday morning after the price of the world’s largest cryptocurrency fell to just above $54,000 during Monday’s rout. That’s still down from nearly $68,000 one week ago, per data from CoinMarketCap.

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    The Canadian Press

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