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Gold’s Price for Investors

The Benefits of Owning Gold in Canada: Hedging Against Inflation and Market Volatility

For thousands of years, gold has been valued by humanity for its beauty and scarcity. The first known use of gold as currency dates to around 700 B.C., when the first coins were produced by the merchants of Lydia, an Iron Age kingdom of Western Asia Minor. Made from a mixture of gold and silver known as electrum, these coins were simple lumps that had been stamped to identify them as currency.

Whether it’s exchanged as money, turned into jewellery, or used in modern electrical and technology applications, gold has remained a highly sought-after precious metal. Today, people are again turning to gold as an investment, but what makes gold so important and is it worth buying?

The Importance of Gold in Today’s Economy

Recent polls have suggested that many Canadians have concerns about the economy and where it is heading in the coming months and years. Consumers are feeling the pressure of inflation and rising interest rates and feel that government spending and supply chain issues are hampering the ability of the banks to get things under control.

These polls have also shown that most Canadians feel a recession is the most likely scenario within the next 12 months. As a result, they are planning to spend less and save more as a precaution. This is making investing in gold an attractive prospect for many.

Why Should You Choose Gold as an Investment?

Gold has several advantages for today’s investor. Here are some of the reasons it might be the right investment for you:
Gold Maintains Its Value
Gold maintains its value well due to low volatility. Stocks and stock funds, on the other hand, can be extremely volatile, with fluctuating value. Gold is more stable and any fluctuation that it experiences is independent of stocks and financial markets. In fact, when stocks crash, the value of precious metals typically rises in response.
Gold Is Helpful During Inflation
One of the primary reasons that people will invest in gold is as a hedge against inflation. This is due to the way it maintains its value. Stocks usually fall when inflation is high, so gold, which maintains its value or even increases, offers some protection.
It Is Considered a Safe Investment
Another effect of inflation and fluctuating stock markets is that people will often panic and remove their money from the system, which only makes matter worse, putting that system at risk of collapse. Gold on the other hand, is a physical asset, and much like owning real estate, it is something that you can see, touch, and monitor physically. This often provides a sense of security because it is something tangible that you can rely on.
It’s Easy to Bring With You
Being a physical asset, you can bring your gold with you in the case of an emergency. It is not an abstract representation of value, it is something that you can hold in your hands and transport if necessary, such as in the case of a natural disaster.
It Is Easy to Sell
Gold is easy to sell, which can be extremely important. During a recession, liquidity allows you to cash in your assets when you need funds. This can help ensure your ability to pay bills and meet other obligations during uncertain times.
Demand Is Growing
Investors and other individuals are now buying gold at a much higher rate, securing a reliable form of wealth for themselves. At the same time, the use of precious metals is on the rise due to their use in electronics, jewellery, and many types of products. This growing demand makes physical gold investment an increasingly smart choice.
Buying and Selling Gold in Canada
Another advantage of gold is its versatility. You can buy it in several forms, finding one that is most suitable for you. Some of the options you have are:
Gold Bars
Also known as gold bullion, gold bars are a popular choice among those buying gold. Purity is important when buying bars, which must be at least 99.5% pure gold to be considered bullion. When buying gold bullion in Canada, it is exempt from all applicable taxes.
Gold bars are available for purchase from any of the five major banks. You may do so online or in-person, but there is a limit on how much you can buy in a 24-hour period, which is typically about $10,000.
Gold Coins
Another popular choice for investing in gold is gold coins, such as the Canadian Maple Leaf. Because coins are a collectible item, you will pay a premium, as well as applicable taxes. Coins also generally have a lower gold content than bars.
Like gold coins, you will be paying a higher price for the amount of gold you receive, and the quality can vary significantly from 10 karat (41.7 % gold content) to 24 karat (99.9 %).
Understanding Gold Prices
Although gold is prized for maintaining its value, that isn’t to say the value doesn’t change. There are several factors that will determine gold prices in Canada, including the level of demand, an inverse relation to fiat currencies, the use of gold as a hedge against inflation, and the supply of available gold.
When investing in gold, it is important to pay attention to the spot price, which represents the exact price of a troy ounce at a specific point in time. This value is determined by calculating the average estimated future price of gold, based on traded futures contracts.


Gold has been important to mankind for centuries and that importance continues today as investors look for a way to secure their wealth. Because of the way gold maintains its value and even increases in times of uncertainty, gold is an excellent hedge against inflation. The fact that it is available in multiple forms such as bars, coins, and jewellery make it even more attractive.

Canada Gold is the leading buyer and seller of gold for Canadians, with an emphasis on excellent customer service and transparent ethical practices, which has earned us one of the highest repeat business and referral rates in the industry.
For more information about buying or selling gold, please contact us today.