How To Buy Gold in Canada in 2024

How To Buy Gold in Canada in 2024

Canadians are drawn to gold because it hedges against inflation and market volatility. Gold allows you to keep your money safe and provides multiple investment options to expand your portfolio. While this asset offers more financial stability, many Canadians still don’t know how to buy Gold.

In Canada, you can either buy physical gold or invest in paper gold. Physical gold involves acquiring tangible coins, bars, or jewellery, often through reputable dealers or financial institutions.

On the other hand, paper gold, including ETFs, futures contracts, and certificates, allows investors to track gold’s price without physically owning any.

This comprehensive guide will take you through everything you need to know about how to buy gold in Canada. It will detail factors to consider and explore the different opportunities for gold investment. You’ll also learn about storage for gold, insurance coverage, and the rules set by the Canada Revenue Agency (CRA) for gold purchases.

What is gold?

Gold is a precious metal that has long been regarded as an asset. People invest in gold because it is perceived as a haven and a store of value. Investors utilize it frequently during periods of market volatility and widespread pessimism. However, gold does not generate income, unlike securities or real estate.

Gold is a valuable, highly speculative, and volatile reservoir of value. Its future value depends on price conjecture as opposed to earnings or dividends. Due to concerns about bank insolvency, a global recession, and stock market volatility, many analysts anticipate that gold will increase in 2023.

Furthermore, you must know the standard weights and purities to buy gold in Canada. The gram and ounce are the most commonly used units for measuring gold. Regarding purity, 24-carat gold, which is 99.9% pure, is the purest.

How to buy gold in Canada

More Canadians than ever are considering buying gold in 2023 to hedge against economic and political instability. Gold is one of those investments that has more than one way that you can invest in it.

If you want to buy gold, you’ll have to decide whether to purchase it in physical form, buy gold stocks, or buy gold ETFs. You can also invest by trading gold in the financial markets as CDFs. Here’s a comprehensive breakdown of how to buy gold in Canada:

1.  Physical gold

Buying physical gold is a sensible way to diversify your portfolio outside of the volatile stock market. Here is how to buy gold if you are in Canada. When opting for physical gold, you’ll need to navigate the following options:

Bars

For those seeking substantial investments, bullion bars present an efficient choice. These larger bars, available in various sizes, are usually priced per gram or ounce. Look for stamped indicators of purity, weight, and manufacturer on the bar’s surface.

To qualify as investment-grade bullion, bars must contain a minimum of 99.5% pure gold, exempting them from certain taxes. Conversely, bars falling short of this purity threshold remain subject to applicable taxes.

Coins

Coins, such as the Canadian Maple Leaf or American Gold Eagle, offer a more accessible entry point for investors. While they are smaller and possess inherent collector value, their convenience and versatility are key advantages. It’s important to note that coins generally carry a higher premium than the equivalent amount of gold in bar form.

Additionally, coins often have a lower gold content, like the one-ounce American Eagle coin, which contains 91.67% gold. The remaining weight is composed of silver and copper.

Jewellery

Antique or high-gold-content jewellery can provide an alternative avenue for gold acquisition. However, purchasing gold through jewellery may entail additional costs, as the value is influenced by craftsmanship and design.

Buyers should know that the amount of gold in a piece may not be the only thing that affects the price. The manufacturer and the complexity of the design are also factors.

Where to buy gold bars in Canada

There are several ways to buy gold in Canada, and here are some standard options:

  • Major Banks: Canada’s prominent banks, including CIBC, Scotiabank, TD, Royal Bank of Canada (RBC), and BMO, offer direct gold purchases via in-person visits. You can also make your purchase through online banking linked to your account.
  • Royal Canadian Mint and Canada Post: The Royal Canadian Mint and Canada Post also offer gold coins for purchase.
  • Local Businesses: Local establishments such as coin stores, individual dealers, and pawnshops offer convenient options for smaller gold purchases.
  • Buy Gold Jewellery: Purchasing gold jewellery requires vigilance due to potential alloying. Manufacturers may mix gold with other metals for durability or colour adjustment. Therefore, prioritize discernment and ensure the authenticity and purity of gold jewellery before purchase.

How to buy gold metals

Gold can be bought from any of the central banks in Canada. You can use your actual bank account, or you can buy gold bars online.

Here’s how to buy gold from the bank: Simply visit any physical branch of a major bank in Canada or use their website. Gold purchases from Canada’s main banks are subject to a daily limit, typically approximately $10,000.

If you buy more than $10,000, you’d have to visit the bank with two forms of identification. Gold purchases by non-bank customers are also subject to lower limits at some banks. For example, TD offers non-bank customers a maximum of $3,000 worth of gold within 24 hours.

Alternatively, you can buy gold from dealers like Silver Gold Bull and Sprott Money. You must open a brokerage account online to buy gold from a broker. These brokerages offer competitive gold prices, storage, gold shipping, and home delivery, among other services.

Best dealers of physical gold

Factors to consider before buying physical gold in Canada

As you research how to buy gold metals, here are several factors that you have to consider:

  • Storage: Secure storage is paramount for physical gold. While home storage is an option, many investors opt for custodial solutions at one of Canada’s major banks. However, it’s important to note that since banks hold gold collectively, the gold you withdraw will not be the same gold you deposited. You can choose allocated storage, in which your gold is kept in a separate vault labelled with your name, to ensure that the gold you withdraw from storage is yours.
  • Manufacturer: The source of your gold matters significantly for long-term value growth. Choose reputable producers like the Perth Mint, Credit Suisse, and the Royal Canadian Mint. Investing with respected manufacturers enhances the potential for a solid return on your investment.
  • Purity: The purity of your gold, whether in coins, bars, or jewellery, profoundly influences its investment value. Seek items with purity levels of at least 91% or, ideally, 99% gold content. Higher purity enhances the resilience of your investment over time.
  • Insurance: Insuring your gold is essential, especially if stored at home, safeguarding against theft or natural disasters. Insurance premiums might impact your homeowners or renters’ coverage even if you utilize external storage; comprehensively examine your provider’s insurance policy to protect your investment.
  • Security: Prioritize transactions with reputable sources. Begin with jewellers affiliated with the Canadian Jewellers Association, known for their integrity. For Canadian dealers, ensure adherence to anti-money laundering regulations outlined by PCMLTFA and FINTRAC.

Pros of buying physical gold

  1. Keep Money Safe: Gold is a reliable way to hold onto your money because it doesn’t change in value like other investments. Gold usually does well when stock prices drop because it’s a safe place for investors who want stability.
  2. Diversify your portfolio: Adding gold to your investments can help protect your money when the market drops.
  3. Easy Buying: Many special stores make it easy to get gold in person, so you can easily get this valuable thing.
  4. Tangible Security: When there’s a big financial problem like the Great Depression, having physical gold can help keep your money safe. Also, gold can’t be damaged by fire, water, or rust, which makes it strong and valuable.

Cons of buying physical gold

  1. Insurance and Storage Considerations: Buying physical gold costs more money because there are extra expenses involved with insurance and storage. The price of storing stuff can change depending on how you store it. You also need to consider how much it costs to insure your things.
  2. Potential for Lower Long-Term Returns: Gold might not make you as much money in the long run as other investments, with the potential for more significant returns.
  3. ETFs Offer Convenience: ETFs are a simple and cheap way to invest in gold without buying and keeping it yourself. It’s easier and more convenient.
  4. Lack of Ongoing Income: Unlike rental income from property or earnings from shares, gold doesn’t give you money regularly. This makes it different from assets that make you money.
how to buy gold - comparewise

2.  Paper gold

Various avenues exist for Canadians seeking exposure to gold within their investment portfolios. Now that you know how to buy gold metals, here are some additional methods to engage in paper-based gold investments:

Gold stocks

Buying gold stocks simply means purchasing shares in a gold mining company. With this approach, you are not investing in physical gold but in businesses related to the gold industry. There will be many gold stock options, all of which will be traded on Toronto’s TSX stock exchange.

While this approach to buying gold is easier, buying stocks carries a higher risk than keeping actual gold safe. Furthermore, you’d have to open a brokerage account to buy gold stocks. Here are a few of the best gold mining businesses to consider buying stock in to diversify your portfolio:

  • Agnico Eagle Mines Ltd.
  • Barrick Gold
  • Franco Nevada Corp.
  • Kirkland Lake Gold
  • Newmont Mining Corporation

Gold ETFs and mutual funds

Mutual and exchange-traded funds (ETFs) are alternatives to investing in individual companies. Putting money into one of these allows you to purchase a grouping of already-compiled shares. Gold ETFs and mutual funds may follow the gold price, the equities of various gold mining and refining companies, or exposure to gold futures and options.

Here are some of the top exchange-traded funds (ETFs) and mutual funds (MFs) to consider investing in:

  • SPDR Gold Trust (GLD)
  • CIBC Precious Metals Fund
  • BMO Precious Metals Fund
  • BMO Equal-Weight Global Gold Index ETF
  • iShares Gold Bullion ETF (CGL)
  • iShares S&P/TSX Global Gold Index ETF

Gold futures contracts

Gold futures contracts involve binding agreements to trade gold at specified future dates and prices. Contract trading is the focus, and while trading fees for futures are generally absent, some brokerages might charge per-contract trade fees. Due to its complexity, futures trading is cautioned against by novice investors, as losses can surpass initial investments.

Gold certificates

Gold certificates serve as legal evidence of gold ownership held with financial institutions. Tradable like stocks, they offer flexibility.

Those aiming to save and invest in gold over time can consider gold savings accounts available through certain banks and financial organizations. These accounts have varying risk and reward profiles based on the chosen investment type.

Gold RRSP and TFSA accounts

Canadian investors can use retirement funds to purchase gold bullion bars and coins. Since 2005, the option of allocating funds to a Roth IRA, either a Tax-Free Savings Account (TFSA) or a Traditional IRA (RRSP), has been available. This tax-advantaged approach can be attractive for purchasing gold at favourable terms.

Where to buy gold in Canada

Here are the most common options for Canadian investors to purchase paper gold:

  • Banks: Banks stand as reliable platforms for procuring paper gold. Renowned financial institutions like Scotiabank, RBC, TD, CIBC, and BMO provide access to gold-related investment opportunities.
  • Brokerage: QTrade and Questrade are brokers that provide many opportunities to invest in gold stocks, ETFs, and funds. Brokerage firms offer essential tools and expertise for making informed decisions, enhancing the convenience and flexibility of paper gold investments.

How to buy gold stock, ETFs, and funds

Research and select a reputable brokerage platform that suits your preferences and provides access to the gold investments you’re interested in. Next, create an account with your chosen brokerage and follow the required steps to verify your identity and fund your account. Explore the available gold stocks, ETFs, and funds within your chosen platform.

Once you’ve selected your desired gold investment, place an order through your trading account. Specify the number of shares you wish to purchase and set the order type (market, limit, stop-loss, etc.). After buying gold stocks, ETFs, or funds, actively monitor their performance and stay informed about market trends.

Consider spreading your investments across multiple gold-related assets to mitigate risk. Diversification helps balance potential losses and gains within your portfolio. However, this technique doesn’t involve gold ownership, exposing you to stock market dangers such as volatility, corporate insolvency, and investment losses.

Best gold stocks, ETFs, and funds dealers

  • QTrade
  • Questrade
  • Bank of Montreal (BMO)
  • Canadian Imperial Bank of Commerce (CIBC)
  • Toronto Dominion Bank (TD)

Factors to consider before buying paper gold in Canada

When buying paper gold, there are a few factors to consider, including:

  • The type of paper gold you want to buy There are several types of paper gold, including ETFs, mutual funds, and mining stocks. Each type has advantages and disadvantages, so it’s essential to research and choose the right type.
  • The fees associated with buying paper gold: There are usually fees associated with purchasing paper gold, such as commissions and storage fees. Be sure to factor these fees into your decision when choosing a paper gold investment.
  • The risks associated with paper gold: Paper gold is not as safe as physical gold, as it is subject to market volatility and other risks. Be sure to understand the risks before investing in paper gold.
  • The liquidity of paper gold: Paper gold is more liquid than physical gold, meaning it can be more easily bought and sold. However, liquidity can vary depending on the type of paper gold you buy.
  • The tax implications of paper gold: There may be tax implications associated with buying paper gold, so consult a tax advisor before investing.

Pros of buying paper gold

  1. Investing in gold can be an excellent way to hedge against market volatility and negative sentiment in the stock market.
  2. Gold provides a stable investment. Gold stocks and ETFs typically offer dividends that investors can reinvest to grow their portfolios.
  3. Having gold in your possession is like buying insurance against inflation and the devaluation of paper currencies.
  4. Finally, gold is an excellent way to diversify your portfolio, whether through physical or gold-based equities.

Cons of buying paper gold

  1. Inflation: When it comes to inflation, there is no guarantee that the price of gold will rise when it does. That being said, many investors will risk it anyway. Sometimes, the risk is worth the reward. That is because inflation doesn’t predict the price of gold.
  2. Politics: There are a lot of factors that contribute to the price of gold. One of those is political. These include things like wars, elections, and new government policies being put into place.
  3. Volatility: The price of gold changes over time. It constantly rises and falls. That doesn’t mean you can’t make money anyway. You just need to be careful when you buy and when you sell. That being said, it is difficult to determine the price of gold.

Insuring your gold purchases

As you learn how to buy gold, you must also learn how to keep your investment safe. While gold is renowned for its stability, external factors such as theft, loss, or damage can jeopardize your investment. Insurance acts as a safety net, covering potential financial losses and providing peace of mind.

However, it is crucial to carefully select the appropriate coverage and stay informed about your policy. Here are some types of insurance coverage that can be used to insure gold.

Types of insurance coverage for gold

  • Homeowner’s/Renter’s Insurance: If you store your physical gold at home, your existing homeowner’s or renter’s insurance may provide some coverage. However, reviewing your policy and ensuring that your gold is adequately protected is crucial. Special endorsements or additional riders might be necessary to cover the total value of your investment.
  • Specialized Precious Metals Insurance: Consider specialized precious metals insurance for comprehensive coverage. This insurance covers theft, loss, damage, and gold market changes suited to precious metal ownership’s special hazards.

Best insurance firms for gold

Although there are many insurance firms, some of the most reliable insurance options in Canada include the following:

  • Apollo Insurance
  • Policy Advisor
  • SquareOne
  • Nowly

CRA rules for gold investors

Now that you know how to buy gold, you must know what laws surround this venture. You must abide by Canadian law since you are buying gold in Canada. The Canada Revenue Agency (CRA) has set some standards regarding gold bullion. Here are a few of the more important ones:

Purity requirements

Gold bullion must be at least 99.5% pure to be eligible for some tax exemptions, such as those available through a tax-deferred retirement account or a tax-free savings account. Gold bullion must have its purity verified by an established national mint or assay office.

Storage requirements

If you have gold bullion in a self-directed IRA or a tax-free savings account, it must be kept with a trusted third party. This third party could be your bank or another custodian. You are entitled to a certificate attesting to the gold bullion’s authenticity and weight from the trustee or custodian.

Capital gains tax

If you sell gold bullion for more than you paid, you may have to pay capital gains tax. Whether or not you owe taxes on your gold bullion depends on your income and how long you hold onto it. If you sell gold bullion after less than a year, your profits will be taxed at your regular rate.

Gold bullion gains are subject to taxation at 50% of the individual’s marginal tax rate if held for more than a year.

Reporting requirements

The Canadian Revenue Agency (CRA) recognizes some gold bullion as “collectables.” Investing in gold bullion does not qualify as this is subject to capital gains taxation. Such gold items must be reported on your tax return if you sell them.

Contribution limits and requirements

Gold bullion, coins, and bars can be held in retirement accounts in Canada, including RRSPs and TFSAs, according to the Canada Revenue Agency (CRA). However, some regulations must be followed. There are annual limits on the total value of assets that can be contributed to a tax-deferred retirement savings plan or tax-free savings account.

Your RRSP contribution maximum is greater than $30,780, or 18% of your earned income from the prior year. You can put up to $6,500 annually into your Tax-Free Savings Account (TFSA).

Because of the potential for changes in these values, it is recommended that you seek the advice of a tax professional to ensure full compliance with the CRA.

How to buy gold conclusion

Concluding this article implies that you are now equipped with the necessary information on how to buy gold in Canada. However, if you decide to deal in gold, it’s vital to only transact with reputable entities. These include the banks, brokers, and insurance companies mentioned in the guide. 

Also, ensure that the gold you purchase and how you purchase it align with CRA requirements. Always look out for how legit the gold is and ensure adequate preparation for storage if you buy physical gold. Lastly, don’t shy away from learning more about how to buy gold because the better you know.

You might also like…

Discover Investment Opportunities

Make your money do more.

12 Results

Advertiser disclosure

Offers shown here are from third-party advertisers. We are not an agent, representative, or broker of any advertiser, and we don’t endorse or recommend any particular offer. Information is provided by the advertiser and is shown without any representation or warranty from us as to its accuracy or applicability. Each offer is subject to the advertiser’s review, approval, and terms. We receive compensation from companies whose offers are shown here, and that may impact how and where offers appear (and in what order). We don’t include all products or offers out there, but we hope what you see will give you some great options.

Young investors can trade stocks and ETFs, all for free.
Min Investment
$0
Target Return
Varied
Retire up to 30% wealthier with Questwealth Portfolio.
Min Investment
$1
Target Return
Varied
Get $20 CAD of BTC with promo code: COMPAREWISE
Min Investment
$100
Target Return
4-7%
Buy and sell gold, silver & platinum online at the best price.
Min Investment
$1
Target Return
Varied
Get up to $2,050 bonus: CASHBONUS2024
Min Investment
$0
Target Return
Varied
Flexibility with a great return.
Min Investment
$100
Target Return
5.20%
Get a $50 bonus when you sign up and deposit $250.
Min Investment
$50
Target Return
Varied
Buying and securing gold has never beeng more simple and affordable.
Min Investment
$1
Target Return
Varied
High return on a shorter term.
Min Investment
$500
Target Return
4.25%
Get a $100 welcome bonus, when you make your top-up*
Min Investment
$10
Target Return
Varied
A new passive income asset class, peer-to-peer lending.
Min Investment
$1
Target Return
Varied
Sign Up And Access 65+ Cryptocurrencies Instantly
Min Investment
$10
Target Return
Varied

FAQs about how to buy gold

What is the best way to invest in gold?

The most straightforward and cost-effective method to invest in gold is through gold ETFs and mutual funds using a Canadian discount brokerage. This approach minimizes management fees and trading costs compared to larger banks.

Do you pay tax on gold in Canada?

Gold is subject to capital gains and losses when sold, just like any other financial instrument or investment asset. Unless the transaction is made in a tax-free savings account, the asset's gain or loss in value will be subject to taxation.

Is physical gold a safe investment?

Physical gold is often considered a safe investment due to its historical value and stability. However, like any investment, it comes with risks and should be part of a diversified portfolio.

Can I buy gold at a bank in Canada?

Major Canadian banks offer online and telephone options to buy gold and other precious metals. These banks provide delivery and storage solutions for various preferences for storing gold bullion or coins.

What is the process for selling gold investments?

Selling gold investments involves contacting your broker or financial institution, providing the necessary documentation, and initiating the sale. Capital gains taxes may apply, except when selling within a tax-free savings account (TFSA). You can sell gold with your broker if you have gold ETFs or mutual funds.

comparewise

August 19, 2023
Fact Checked
Categories:

Grow your finances today.

By submitting, you agree to comparewise’s terms of use and privacy policy.

You may also like

Canada is known for its high standard of living and excellent quality of life. One cruc...
Gas prices fluctuate daily, and it can be difficult to predict tomorrow’s price. Howeve...
Moving homes can stir emotions – excitement, nostalgia, and sometimes anxiety. The fina...
Are banks open today in Canada? This question is common among Canadian immigrants who n...
When applying for jobs, candidates often get stuck on the CV vs Resume debate to decide...
Car loan?
Personal Loan?

Top deals await you just a short
application away!