Beyond stocks and bonds:
gold, silver & precious metals
for Canadian investors

A well-diversified portfolio isn't just stocks, bonds, and a savings account. For generations of Canadian investors — particularly those approaching or in retirement — physical precious metals have served as a reliable store of value, a hedge against inflation, and a counterweight to paper asset volatility.

This isn't a fringe strategy. Central banks around the world hold gold as a reserve asset. Canada's own history with the gold standard shaped the country's monetary policy for decades. And in periods of high inflation — like Canada experienced from 2021 to 2024 — physical metals have consistently held purchasing power when paper currency didn't.

This guide covers what precious metals investing actually involves for Canadians, how it fits into a balanced portfolio, what to watch out for, and where to buy safely.

Why Canadians invest in precious metals

There are three primary reasons Canadians add physical metals to their portfolios:

• Inflation hedge: Gold and silver have maintained purchasing power over centuries. When the Canadian dollar loses value due to inflation, metals priced in CAD typically rise in parallel.
• Portfolio diversification: Precious metals have a low or negative correlation with equities. When stock markets fall sharply, gold often rises — smoothing overall portfolio volatility.
• Safe haven asset: During geopolitical uncertainty, currency crises, or banking system stress, physical metals are universally recognized stores of value that don't carry counterparty risk.

The four main precious metals

Physical metals vs. paper gold: what's the difference?

You can get exposure to precious metals in two ways — physical ownership or paper instruments. They are fundamentally different.

Factor	Physical Metals	ETFs / Paper Gold
Actual ownership	Yes — you hold it	No — you hold a claim
Counterparty risk	None	Yes — fund/issuer risk
Storage required	Yes — home or vault	No
Liquidity	Good — dealers buy back	Excellent — trade instantly
Privacy	High	Low — registered account
TFSA/RRSP eligible	Generally no	Yes
Management fees	None after purchase	Annual MER applies

Most Canadian investors who want true wealth preservation choose physical metals. Investors who want portfolio exposure without storage logistics choose ETFs like the iShares Gold Bullion ETF (CGL.C) listed on the TSX.

How much of your portfolio should be in precious metals?

There's no universal answer, but common frameworks suggest:

• Conservative allocation: 5–10% of portfolio in gold and silver as an insurance position
• Moderate allocation: 10–15% for investors who are specifically concerned about inflation or currency debasement
• Aggressive allocation: 15–25% for investors who hold a strong view on monetary policy or geopolitical risk

Most financial advisors suggest the 5–10% range as a starting point — enough to provide meaningful portfolio protection without overly concentrating in a non-yielding asset.

Buying precious metals in Canada: what to look for

Not all precious metals dealers are equal. When buying physical gold or silver in Canada, look for:

• Established reputation: Years in business, customer reviews, and industry recognition matter significantly in a market where counterfeits exist
• Transparent pricing: Premium over spot price should be clearly disclosed — avoid dealers who obscure their markup
• Secure delivery: Fully insured shipping with tracking is non-negotiable for any order of meaningful size
• Buyback program: A reputable dealer will buy back what they sell you — this is critical for liquidity when you want to exit
• Canadian operations: Dealing with a Canadian company means no cross-border complications, no currency conversion, and delivery in CAD

Precious metals in your TFSA or RRSP

Physical precious metals generally cannot be held directly in a TFSA or RRSP — the CRA has specific rules about what qualifies as a registered investment. However, there are two ways to get registered account exposure:

• Precious metals ETFs: Funds like iShares Gold Bullion ETF (CGL.C) and Sprott Physical Gold Trust (PHYS) are TFSA and RRSP eligible and hold allocated physical gold on your behalf
• Mining stocks: Canadian gold miners like Barrick Gold (ABX) and Agnico Eagle (AEM) are registered-account eligible and provide leveraged exposure to gold prices

For investors who want true physical ownership — coins and bars you can hold — that exposure sits outside registered accounts, typically in a home safe or a private vault storage service.

The risks of precious metals investing

Precious metals are not a risk-free investment. Key risks to understand:

• Price volatility: Gold and silver prices can fluctuate significantly in the short term, even if long-term trends favor appreciation
• No yield: Physical metals pay no dividends or interest. Returns come solely from price appreciation
• Storage and insurance costs: Storing physical metals securely has a cost — home safes, bank safety deposit boxes, or private vault services all add ongoing expense
• Liquidity timing: While reputable dealers offer buybacks, you may not always get spot price — dealer premiums apply on both buy and sell sides
• Tax treatment: In Canada, gains on precious metals are treated as capital gains — 50% of the gain is included in taxable income. Consult a tax professional for your specific situation

The bottom line

Precious metals aren't for everyone — and they shouldn't be the foundation of any portfolio. But as a 5–15% allocation alongside your TFSA, RRSP, and savings accounts, physical gold and silver provide genuine diversification benefits that paper assets simply can't replicate.

For Canadians who want to start with physical metals, buying from an established, transparent Canadian dealer is the most important first step. Silver is typically the most accessible entry point given its lower price per ounce, while gold is the preferred long-term wealth preservation choice.