Canadian Gold Buying Guide.


You need not turn your broom closet into a miniature Fort Knox just so you can buy gold. Actually, a savings or investment account might be all the space you need.

Buying Bullion Gold Bars

Gold Bars

Gold bullion, also known as gold bars, is a common form of gold investment. The purity, maker, and weight of the bullion you purchase should all be clearly marked on the front of the bar you purchase.

Investing-grade gold bars need to be at least 99.9 percent pure. bullion, which must contain at least 5% gold by weight, and is exempt from all taxes if it does. But even if they aren't, they still have to pay taxes.

The five largest Canadian banks (Scotiabank, RBC, TD, CIBC, and BMO) all sell gold, and you can do so in person, over the phone, or through your online banking and bank account. Canada's major banks impose a daily limit on the amount of gold you can buy that is typically around $10,000. More than that requires visiting a physical location with two forms of identification in hand. Gold purchases by non-bank customers are also subject to lower limits within 24 hours at some banks like TD. This maximum is $2,999 at TD. 99

If you don't want to keep your gold at home, any of Canada's major banks will gladly accept it as collateral for a custodial account and charge you nothing for the service. Although gold is stored in banks, the gold you withdraw may not be the same gold you deposited. Allocated storage allows you to withdraw your gold from a separate vault in your name, ensuring that the gold you withdraw is yours. This service comes with a yearly fee that can be a flat rate or a percentage of the gold's value.

Gold can be purchased from a reputable online retailer or in person. Pure gold bullion is exempt from taxes, but you'll have to pay for delivery, shipping, and insurance.

Gold Coins

Common examples of gold coins include the American Gold Eagle and the Canadian Maple Leaf. Due to the increased demand from collectors, the final price will be higher than that of gold held in bar form plus any applicable taxes. Coins also have a lower percentage of gold in them than gold bars. For comparison, a one-ounce American Eagle coin is only 91 67% gold The actual weight of the coin is 1 1 ounces total, with about 1 ounce coming from gold and the rest from silver and copper.

Trustworthy coin shops, pawn shops, and individuals are your best bets for acquiring gold coins. The Royal Canadian Mint, Canada Post, and the country's five major banks all sell gold coins. Gold coins minted by the Royal Canadian Mint in 2014 or later can be checked for authenticity using the mint's or a registered dealer's Bullion Digital Non-destructive Activation (DNA) technology. Using a high-resolution photograph taken by the Bullion DNA device, specialized software can confirm the authenticity of your coin's unique security features.

Several easy tests can be used to determine whether or not a coin is genuine, even if it was not struck by the Royal Canadian Mint.

  • If your coin can be picked up by a magnet, it is not gold or an alloy of gold.
  • When a gold coin is struck, a high-pitched ringing sound, or "ping," should be heard. The sound of non-gold coins will be muffled and will not reverberate as long.
  • Gold should leave a gold mark, not a black one, when dragged across an unglazed ceramic plate for the "Ceramic Test."
  • When placed in nitric acid, pure gold should not oxidize or corrode. However, this is dangerous because it can corrode other metals and ruin any gold items that aren't pure. To determine the purity of a gold's karat, an acid test can be performed.


Gold can also be acquired through the purchase of jewelry, particularly older pieces with a higher probability of being made of gold. Like gold coins, however, you should expect to pay a premium for the actual weight of gold in your purchase. (It can range from 20 percent to 300 percent, depending on the maker. )

Also, remember that not everything that appears to be valuable actually is. Gold is often alloyed with other metals by manufacturers to increase durability or alter color. Here is the relationship between the karat and the purity of gold:

When purchasing gold jewelry, you should exercise the same caution you would with coins. Make sure the jeweler you buy from has a good reputation. Canadian Jewellers Association members are a good place to start looking because they have agreed to a code of ethics that ensures they will be forthright and honest about the jewelry they sell.

Also, under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), Canadian precious metal and gemstone dealers who handle transactions totaling ,000 or more must comply with anti-money laundering regulations issued by the Financial Transactions and Reports Analysis Centre (FINTRAC). This necessitates the implementation of a compliance program, the maintenance of a detailed sales history, adherence to government ministerial directives, and observance of Know Your Customer rules on the part of all dealers.

You should also collect as much paperwork as possible to use as proof of the gold's purity before selling it.

Considerations for Purchasing Bulk Gold

There are a few things to keep in mind if you decide to invest in physical gold:

  • Gold in physical form needs a safe place to be stored. While keeping gold at home is an option, many investors instead choose a third-party custodian. You should consider the added expense of safe storage when calculating the total cost of your gold investment.
  • If you opt to keep your gold at home, you should insure it against loss due to burglary or natural disaster. Your homeowner's or renter's insurance premiums may increase as a result of this. And if you don't keep your gold at home, you still need to know how well your storage facility is guarding your precious metal.
  • Because of the long-term nature of your investment, it's important to make sure you're purchasing from a reputable manufacturer. Look for reputable manufacturers such as Credit Suisse, the Perth Mint, and the Royal Canadian Mint when investing in gold.
  • The purity of the gold used to make the coin, bar, or piece of jewelry greatly affects their value and investment potential. Investing in gold? Make sure the gold you buy has a high enough purity to last. It follows that you're aiming for gold items that are at least 91% pure, and more likely 99%.

Other Options for Purchasing Gold

If you don't feel like going to the trouble of mining for gold, but still want some bling in your portfolio, consider investing in gold-related stocks, mutual funds, and exchange-traded funds.

Gold Mining Shares

Stocks in gold mining and refining companies are an alternative to purchasing physical gold. Companies like Barrick Gold (GOLD) and Newmont Mining Corporation (NMC) are at the top of the gold mining industry.

Gold mining companies' stock prices may not track the movement of the price of physical gold exactly, but they will likely be correlated with it. You can invest in gold this way without having to worry about the security or convenience issues associated with handling actual gold.

Funds and ETFs that Invest in Gold

Gold mutual funds and exchange-traded funds (ETFs) allow investors to diversify their gold holdings across multiple companies, rather than just one. Gold funds may follow the gold price, hold stocks of various gold mining and refining companies, or give investors access to gold futures and options.

Some of the best gold mutts and ETFs are:

  • Gold Exchange Traded Fund (iShares)
  • Investment Trust for Gold, BMO Equal Weight Global
  • CIBC's Gold and Silver Fund
  • Gold and Silver Investment Fund
  • The BMO Gold and Silver Fund

ETRs (Exchange Traded Receipts) issued by the Royal Canadian Mint.

The Canadian Gold Reserves Exchange Traded Receipts (ETR) Program was introduced by the Royal Canadian Mint in 2011. By purchasing a security listed on the Toronto Stock Exchange (TSX), investors can gain title to gold held in the mint's reserves. When investing in an ETR, as opposed to a traditional gold ETF, the investor takes physical possession of the gold bullion.

When redeemed, gold ETRs are worth gold coins, bars, or cash equal to the lesser of the day's gold price or the ETR's market price when you cash out. There will be no cost to you. Added to the then-current share price, a 35% annual fee is required.

Options and Futures

Futures and options can be lucrative investments for those with a high risk tolerance. (If you don't know what either of those terms means, you should probably stay away from these gold investments for the time being because of how risky they are. )

In gold futures, you agree to make a future purchase or sale of gold at a predetermined price. An agreement to buy or sell gold at a specified price by a specified date is known as a gold options contract.

A brokerage account and extensive experience are essential for buying gold futures or options. If you don't want to miss the window of opportunity to exercise your options, you'll need to keep a close eye on your account and the price of gold. Futures and options typically involve taking on leverage, or using borrowed money to buy securities, which can increase the risk of loss.

How Safe Is Gold as an Investment?

You've come to the wrong place if you expect to find a modern-day gold rush. Gold's price rose by about 36% over the past five years, while the S&P 500 rose by about 104%. So, what's the big deal?

For some, gold represents a haven from inflation and severe market fluctuations. For instance, the stock market as a whole fell 33% during the great recession of 2007-2008. However, gold prices only dropped by 2%.

However, due to the erratic nature of its price, gold is not a completely (or even primarily) secure investment. Actually, it's quite simple to put together a diversified portfolio of investments that doesn't include gold at all.

But shoot for having it make up only a small fraction of your investment capital if you want to see some of that glittering gold in your portfolio.

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