How to Buy Gold in Canada

You've heard about the importance of buying gold, why investing in gold is a savvy move, and now you want to act. Fast. We wanted to provide you with a guide on how to buy gold in Canada in order to help make something that sounds complicated be an easy process.

Essentially, you can buy gold in three ways. You can buy bullion, an ETF or the stock of gold-producing companies. To break it down for you in simple terms, an ETF is an exchange traded fund, and it's a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. This fund owns the underlying assets (shares of oil futures, gold bars, foreign currency, and so on.) and splits up the ownership of those assets into shares.

But ETFs aren't attractive to some buyers.

As noted in this media report, Barry Stuppler, president of Stuppler & Co., a precious metals dealer in Woodland, California, explained that ETFs don’t own the physical gold, and instead trade in a gold index. For example, the CBOE Gold Index follows the price of gold-mining companies. Also, Gold ETFs may even trade in gold futures contracts, causing them to be risky investments, says Paul Mladjenovic, author of “Precious Metals Investing For Dummies," in the report.

So that's why gold coins or bullions is preferrale. The price of the 1-ounce, 24-karat Maple Leaf often matches gold’s spot price and enjoyed a booming rise between 2005 and 2011, when the price of gold more than quadrupled.

It's well known that the Canadian Maple Leaf and American Eagle gold bullion coins are the easiest to buy and sell. And the 9999 Canadian Maple Leaf is the most recognized bullion around the world, and note that the American Eagle’s gold content and purity is guaranteed by the U.S. Mint. You may have heard about the new Gold Buffalo, which is the U.S. version of the Maple Leaf and should be recognized everywhere as well.

You can also opt for buying bullion too. Bars can be bought by different dealers, including some banks. Besides the beauty of the bars and the value of owning them, ensure you have a process in place to store them safely. Vaulting services can be costly but your bank could also offer you less expensive options such as a safety security box.

It might be smart to pay for insurance for your bullion, especially if you store them in your home.

Bullion coins are most often offered as 1oz gold coins. They differ from other precious metal coins that are valued not for their metal content, but for their rarity and prestige as a collectible. They also benefit from a more global recognition.

Additionally, gold certificates are one more indirect way to hold gold. Canadian banks offer gold certificates that allow investors to own gold without taking physical possession of the precious metal.

Investors in gold certificates aren't typically charged storage or insurance fees, but are subject to sales charges.

So there you have it, a useful guide on how to buy gold in Canada, in whichever form you feel comfortable with at this point in your investment career. You may want to mix and match different options - invest in an ETF and buy bullion - and then see which path is right for you.

If you have any questions about purchasing gold, don't hesitate to book a free consultation!