Precious metals have taken center stage in Canadian markets. With gold trading above $5,100/oz and silver near $112/oz, investors are flocking to ETFs that provide exposure to miners and bullion. For Canadians, the TSX offers a range of funds that make it easy to participate in this rally.
Why Metals Are Surging
- Inflation hedge: Persistent inflationary pressures have driven investors toward safe-haven assets.
- Geopolitical uncertainty: Global conflicts and currency volatility have boosted demand for gold and silver.
- Industrial demand: Silver’s role in solar panels and electronics adds a growth angle beyond its monetary appeal.
- Canadian advantage: With a resource-rich economy and strong mining sector, Canada is well-positioned to benefit.
Key Canadian ETFs to Watch
- ZJG – BMO Junior Gold Index ETF
Focus: Junior gold miners
Why it matters: Higher risk/reward profile, levered to exploration and development success. - CGL.C – iShares Gold Bullion ETF (CAD-Hedged)
Focus: Physical gold bullion
Why it matters: Tracks spot gold prices directly, hedged in Canadian dollars. - MNT – Royal Canadian Mint Gold ETF
Focus: Gold bullion trust
Why it matters: Backed by physical gold stored at the Mint, appealing to conservative investors.
Recent Performance Snapshot
- XGD gained over 45% in 2025, outpacing the TSX Composite by nearly 30%.
- ZJG surged more than 80% in six months, reflecting investor appetite for junior miners.
- CGL.C tracked gold’s steady climb, rising 28% year-over-year.
- MNT provided stable bullion exposure, with modest gains but lower volatility compared to miners.
These figures highlight the divergence between bullion-backed ETFs and miner-focused funds. Bullion ETFs provide stability, while miners amplify gains during rallies.
Investor Scenarios
- Conservative Investor: Allocates 10–15% of their portfolio to bullion ETFs like CGL.C or MNT. These funds act as an inflation hedge and reduce volatility.
- Aggressive Investor: Takes on higher risk with ZJG, betting on junior miners that can deliver outsized returns if exploration succeeds.
- Balanced Investor: Combines XGD with CGL.C, capturing both the upside of miners and the stability of bullion.
This mix allows Canadians to tailor exposure based on risk tolerance and investment goals.
FAQs for Canadian Investors
Can I hold gold ETFs in a TFSA or RRSP?
Yes. Most Canadian-listed ETFs are eligible for registered accounts, making them tax-efficient.
Do bullion ETFs pay dividends?
No. Bullion ETFs track the price of gold or silver directly. Miner ETFs, however, may distribute dividends.
Are gold ETFs taxed differently than stocks?
Generally, gains are taxed as capital gains. Dividends from miner ETFs may be taxed as income, depending on account type.
What’s the difference between hedged and unhedged ETFs?
CAD-hedged ETFs like CGL.C protect against currency fluctuations, while unhedged versions may expose investors to USD/CAD volatility.
Investment Considerations
- Bullion vs. miners: Bullion ETFs (CGL.C, MNT) move in line with gold prices, while miner ETFs (XGD, ZJG) can outperform in rallies but carry operational risks.
- Volatility: Junior miners (ZJG) are highly volatile—ideal for aggressive investors but risky for conservative portfolios.
- Currency hedging: CAD-hedged bullion ETFs reduce foreign exchange risk.
- Income potential: Some miner ETFs pay dividends, while bullion ETFs typically do not.
Risks to Keep in Mind
- Boom sustainability: Metals rallies can reverse quickly if inflation cools or geopolitical tensions ease.
- Opportunity cost: Heavy allocation to metals may limit exposure to growth sectors like tech or renewables.
- Liquidity & fees: ETFs differ in management expense ratios (MERs); bullion funds often have lower fees than miner ETFs.
Practical Guidance for Canadian Investors
- Long-term hedge: Use bullion ETFs for portfolio stability and inflation protection.
- Growth play: Allocate a smaller portion to junior miner ETFs for potential outsized gains.
- Balanced approach: Combine bullion and miner ETFs to capture both stability and upside.
- Dividend angle: Highlight miner ETFs that distribute income, aligning with dividend-focused strategies.
Conclusion
The 2026 boom in gold and silver has created a rare opportunity for Canadian investors. Whether through bullion-backed ETFs for stability or miner-focused funds for growth, metals can play a strategic role in diversified portfolios. As always, sizing positions carefully and balancing risk is key – especially when markets are running hot.