Tariffs push some Canadians to buy gold as a safe haven

Tariff-fuelled economic anxiety is pushing some Canadians to look for safe havens to ride out the storm

People in Canada are getting increasingly worried about the economic anxiety fuelled by U.S. President Donald Trump’s threatened tariffs, and precious metal dealers say it's driving a rush to gold.

Some small-scale investors are also concerned about the Canadian dollar and the risk of recession, according to the dealers, who have seen a sharp rise in demand for physical gold and silver from members of the public.

The metal will typically flow into the country in large quantities from the Royal Canadian Mint, but one dealer said the company is now placing an unusually large number of small orders with the mint to keep up with demand.

Canada Gold CEO Tyler Whitmore said the company, which has two Ottawa locations and 14 other stores across the country, is normally placing one major order per month for gold bars and coins from its distributors.

But at the moment it's placing two orders per week, and the company is also seeing an unusual level of demand for silver.

“The increase in demand for physical bullion is significant across all of our stores. We typically see a surge in demand during periods of market uncertainty and turbulence,” he said.

“We saw this during the onset of the COVID-19 pandemic, but this could be the highest period of demand for physical bullion that we've seen in our 15-plus year company history.”

He said buyers are nervous about the Canadian dollar and the risk of recession, which are both linked to U.S. economic policy.

“Canadians are looking to invest in assets that typically perform well during periods of market uncertainty and turbulence, and they are turning toward physical gold and silver assets that they can actually hold in their hand,” he said.

“With rising inflation, interest rates, and minimal wage increases, Canadians are looking for ways to preserve their purchasing power and maintain financial stability in an environment defined by economic instability.”

At Sprott Money, a gold dealer in Toronto, sales of gold and silver are up about 25 per cent compared to the same time last year. The company's president, Larisa Sprott, said she has noticed “a huge change in the physical gold market” that began when Trump was elected in November.

“We've been seeing a lot of fear coming into the market, and typically when we see fear in the market, we see people go to safe havens,” she said.

“The safe haven is of course gold, and silver to a lesser extent. We're also seeing a huge increase in the gold market share in ETFs, which is another sign that people are going to safe havens.”

It's certainly possible — and easy — to get into the gold market without buying a hunk of physical metal and stowing it away at home. Exchange-traded funds (ETFs) make up a sizeable share of the gold market, allowing customers to get in on the action with the click of a button.

According to the World Gold Council, gold-backed ETFs saw strong inflows last month, the highest since March 2022. Most of that surge came from North America, which recorded the strongest inflows since July 2020.

But Sprott said many customers want the comfort of physically holding the metal in their hand. For some, it's the ultimate safeguard against the risk that today's instability could turn into something far, far worse.

“For some of our clients there is that concern, absolutely, that there could be some breakdown, bank account seizures. There could be some run on the banks,” she said.

“So definitely, I think something that makes our clients feel safe is: I've got it at home. It's in my safe. I don't have it in the bank. They can't take it from me.”

Anthony Herceg, managing director of precious metals distribution for North America at TD Securities, has seen a double-digit spike in transactions of precious metals over recent months. He said it started ramping up after Christmas and has affected silver, platinum and especially gold.

With gold prices at record highs, Herceg said customers are beginning to buy smaller quantities — fractions of an ounce instead of the standard one-ounce unit. An ounce now costs about $4,400, after surging almost 20 per cent in just three months.

“They still want to invest, so they invest what they can into what they can afford,” he said.

“The interesting part about this whole situation is that it's affecting smaller investors more than large institutional investors, because they have the capacity to buy in bulk if needed, and they're not as concerned about the price fluctuations to the same degree.”

Herceg said small-scale investors are largely focused on buying physical gold and silver coins and bars, while institutional investors are making large transactions of gold in kilo bars and smaller units of platinum and silver.

He said the small-scale investors are largely based in Canada and the U.