It’s the Golden Rule: Those with the gold make the rules. Canada has essentially none.
The world’s most precious metal soared to a new all-time high on Thursday as investors sought safety from market uncertainty fuelled by renewed Trump tariff threats and a weakening US dollar.
On Thursday spot gold climbed 1.2% to USD$2,793.25 an ounce in New York, briefly touching a record $2,798.50 and eclipsing the previous record of $2,790.07 per ounce reached in October 2024.
The rally comes as the US greenback dipped 0.2% following lower-than-expected GDP growth figures, making gold more attractive to investors. With the US Federal Reserve holding interest rates steady on Wednesday — and economic data hinting at further potential cuts — analysts said gold is becoming an increasingly appealing asset.
“This most certainly occurred after the softer-than-expected GDP print, which has softened the dollar further,” said Ole Hansen, head of commodities strategy at Saxo Bank.
Observers pinpoint three major factors influencing gold prices in 2025: Federal Reserve monetary policy; central bank gold buying; and geopolitical uncertainty, particularly surrounding Trump’s return to the political stage.
History supports that outlook. During periods of heightened geopolitical tensions, gold prices have historically surged. From February to March 2024, gold prices rose 8% amid escalating conflicts in Ukraine and the Middle East, reinforcing its status as a crisis hedge.
However, fears over trade tensions are also driving its rise. Trump’s renewed push for steep tariffs on Mexico, Canada — and potentially China, with the world’s fifth largest reserves — has heightened economic uncertainty.
“We are seeing keener anxiety about the Trump administration’s new policies on trade and foreign policy,” added market analyst Jim Wyckoff with Kitco Me
As gold prices soar, Canada — the world’s fourth largest gold producer — could have stood to benefit, assuming the federal government hadn’t sold off its reserves. The country’s mining industry is a major player in the global gold market, with major firms like Barrick Gold and Agnico Eagle Mines producing millions of ounces annually.
And yet, the Trudeau government wound down its gold reserves to basically nothing after a multi-year strategy of selling them off in favour of hoarding other countries' currencies.
In fact, Ottawa has about 77 ounces of gold — technically zero — worth about CDN$300,000 at current market prices. All of that consists of gold coins, as opposed to large bullion bricks it once hoarded.
By contrast, Canada's gold reserves stood at 2,300 metric tonnes as recently as 2022, which made it the seventh largest gold reserve in the world.
The good news is gold’s rally is expected to continue well into 2025.
The annual LBMA Precious Metals Forecast Survey predicts gold could reach as high as $3,290 per ounce this year, with an average price forecast of $2,736.69 — 14.7% higher than last year’s average. Although it was up more than 20% last year, gold generally averages about a 10% return annually.
“Analysts are expecting significant price volatility, but no one is ruling out gold breaking the $3,000 mark,” the report noted.
The rising gold demand has also lifted silver prices, with forecasts suggesting silver could top $43.50 per ounce in 2025 — a 16% jump from last year. Silver is expected to outperform all precious metals this year given synchronized central bank rate cuts, a more supportive economic backdrop, strong solar demand and a weaker US dollar.