The Canadian Investor - 6 Ways to Invest in Gold as It Hits Record Highs

Episode Date: September 8, 2025

Gold just hit a new all-time high, and we’re dedicating a full episode to what’s driving the move and the smartest ways to get exposure. We break down the macro tailwinds and why those forces can keep a bid under the metal.  Then we get practical, walking through the different ways investors can gain exposure to gold, from holding physical bullion to ETFs, miners, and more—highlighting the pros and cons of each approach. Tickers of Stocks and ETFs discussed: GLD, ZGLD.TO, GDX, GDXJ, ZGD.TO, OUNZ, PHYS, FNV.TO, AEM.TO, ABX.TO  Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time. Welcome back to the Canadian Investor Podcast. We are back for a regular episode. So typically on Thursdays, if you're a new listener, we'll do news and earnings. And then on Mondays, we'll pick different topics. Sometimes it's more, there is kind of a news component to it, sometimes just a bit more concepts.

But yeah, we'll kind of mix it around a little bit. But today we're doing something a bit different. We've, I think I had done a segment on gold and how to own gold, maybe a year, year and a half ago with Brayden, but was like maybe a 10, 15 minute segment. And so we're going to do pretty much a full episode on gold, especially that now gold has hit a fresh all-time high. I started doing my notes or recording this. Probably good to timestamp because it's recorded a few days in advance before the release.

But as I started doing my notes yesterday on the second, I was like, oh, okay, just hit a fresh all-time high. I think it was like 3508 USD. And then this morning I had to update because I hit a new all-time high overnight of like 35-40, roughly and now i mean i'm just going to show the chart for joint tc i it's at 3572 announced so again just hitting some fresh all-time highs it's been really in just just crushing it over pretty much since i think monday even though the markets were closed at gold spot markets some around the world were trading and you saw the price of gold started going up continued yesterday and then today it's just on another leg up so we'll we'll talk

about some of the reason, but it's been pretty crazy. And before I get started and I'll let you the time, a chance to talk to you. Sorry about that. It's what it fascinates me is how little it's discussed on mainstream financial media. Like if you go on CNBC, you literally have to like dig and dig and dig. It's nowhere near to be seen on the front page. Whereas if you see like SNP 500 or even Bitcoin, it'll usually be right up there whenever it hits a fresh all-time high. Yeah, and I think that's kind of an element that, you know, a lot of, well, I don't want to say a lot, but I would say, like, probably most investors, like, don't have any exposure to gold. I think primarily because there's, like, so many ways to play it that they often

maybe just get confused a bit and, like, don't get any exposure at all, which is kind of why I think we're doing this episode, because there is a multitude of ways to actually get exposure to the price of gold overall. But, I mean, I think it's less talked about because there'd probably be less hits on those pieces. Uh, in terms of traffic. Yeah, I guess it's not as 60. Yeah, exactly. Yeah, I mean, as Palantir or whatever. I mean, it's definitely sexy in terms of returns over the last while. That's for sure. And I am like now, I'm starting to get a lot more questions about gold. I mean, unfortunately, that comes after it's had a monumental run, that happens a lot with stocks as well usually they'll go up a ton and then people start asking

questions but i do actually believe there's quite a few uh tailwinds for for gold moving forward but yeah i just think it's it's not really a well-known owned assets so not a lot of people especially among retail investors so not a lot of headlines are are going to grab that portion of it yeah my sense is that people you know traditionally i think you have you know gold bugs that are super into gold and gold miners. And then you have more speculators that would have played more in the junior mining space, maybe more beginning investors, trying to go into those penny stocks, junior miners, not really knowing what they're doing in terms of evaluating those businesses, but really trying to get the home run, taking outsized risks. And then you have people who want little to nothing to do with gold,

obviously led by Warren Buffett. That's always been not really into gold whatsoever. But you also have a lot of macro investors that will view gold as a pretty important asset to have in a balanced portfolio. Obviously, Ray Dalio's way up there has been pretty bullish on gold. And that's a reason that over the last year and a half, two years for me, I've been allocating more and more towards gold because I do invest with a good eye on macro. and I think there's a lot of tailwinds for cold that, unfortunately, are more macro tailwinds, but I don't think they should be ignored, and it has worked out pretty well for me, and I think there's still a lot of room to run, and we'll go over why some of the reasons why gold is up so much in the past month.

But, I mean, if you're looking at gold even over the last year, I can use a proxy here. I can just use a GLD, for example. That's the largest ETF for gold. So in the past year, if you're, I'm looking here, it's, it's up around 41%. And the past year, yeah, in year today, 32%. So it is, it's pretty impressive. Yeah, it's lagged like the markets through most timelines, but actually if you go out to 25 years, and this is like very convenient because 25 years just happens to be, you know, dot com bubble,

but it's actually doubled the returns of the S&P 500 over the last 25 years. so that's one timeline most timelines it has underperformed but over the last you know last few years it's done exceptionally well i would say i'm a bit late to the party although i did and i did own agniko eagle i ended up selling it way too early and now i obviously own franco i think i bought franco what probably three four months ago now but i think some exposure is good and as i mentioned like a lot of people there's like probably five or six different ways to get exposure to it. So a lot of them don't really know what to do, which is why we're going to go over all those today. Okay. So what's causing this recent run up in the price of gold? So increasing deficits by

government around the world. So that means more supply of debt, making bonds less attractive. Now it makes it also inevitable that central banks will likely have to step in at some point because the more supply you have bonds if the demand remains the same or doesn't keep up with the supply. Well, you have, you need to get that demand somewhere. If not, people will the price of those bonds will go down and the yield will go up so what you could see it's called quantitative easing or QE so what you would see is central banks actually like lack of better words printing money to be able to purchase those bonds and therefore kind of provide a floor for that interest lower the interest that the governments have to pay because there'd be

sufficient demand and it would also just make sure that the yield doesn't go up too high and that governments don't end up just having to cat like the interest payments just becomes out of control so it's pretty much inevitable i think if you listen to anyone or if you're into macro a bit i think most people agree that this is going to happen it just depends on when exactly i would say probably in the next year you'll see quantitative easing kind of ramping up in countries around the world and for context here the global m2 money supply from major central banks is up close to 10% year to date. So that increases the supply of money. So the more money you have and there's more money running after hard assets, gold being one of those hard assets, those assets that can't be

created out of thin air. So clearly that will be pushing the price up if your unit of measurement is constantly being increased or debase as most pretty much all fiat currencies are. So in other words, fiat debasement keeps being a big tail win for gold. And you could easily make the argument that the price of gold isn't going up by itself it's the value of the money in which is denominated in that is actually losing value and therefore pushing the price of gold up because it's being accounted uh in dollars yeah and i mean that's kind of always been the situation with gold i mean it's it's it's kind of a safe haven for you know and infinite money supply it's kind of a it's a finite asset so that's kind of the draw that's kind of been the long draw like

a kind of a inflationary hedge, I guess you could say, especially during like really fast periods of inflation. I'm sorry, of inflation. I think it's done quite well. Yeah, exactly. So the second reason, less confidence in US treasuries as a safety asset. So a little bit related to the previous point, but gold is seen like you said as an alternative to U.S. treasuries, especially bonds. Sure, gold doesn't provide any yield, but it has a track record of holding its value very well, historically versus fiat currency and fiat currency we'll mention this quite a bit so just for newer listeners because i know we do get some new listeners oftentimes like every month every episode but even more so in september in the new year as well fiat currency just means that the currency so canadian

dollar u.s dollar is not backed by anything so in the past prior to 1971 it would have been backed by gold the u.s dollars and the other currencies indirectly by gold. because they were tied to the U.S. dollar, but fiat currency essentially means that the government decides how much money there is in circulation. And government, I mean the central banks. The issues with long-dated bond is that there's a real risk that you earn a positive real interest rate. So if the yield doesn't keep up with inflation, you lose money on a real basis. And in other words, you lose purchasing power.

And the main purpose of investing is to keep or increase your purchasing power. So it's actually a pretty risky asset when you start thinking about it because you can look at the official metric for government inflation and I would debate that it's probably not what your true inflation is from your day to day basis. So you can make a very easy case that you're going to have a very hard time at not losing any money by holding government bonds on a real basis. Sure, on a nominal basis, you'll have more money if they pay their interest. they can always print money so you'll get paid one way or another but if the value of that goes down you're not really better off central banks keep buying gold would be the next reason so after reaching record highs in 2024 central bank's demand for gold is remaining very strong in 25 gold actually surpassed a euro late last year and now is firmly in second place behind us

behind U.S. dollar instruments like the U.S. dollar or U.S. Treasury in terms of assets held by central banks globally. And keep in mind, too, that when a central bank buys gold for its reserves, it's likely off the market. Like, it's not selling them anytime soon unless there's an emergency. And they also tend to be priced in elastic, meaning that they'll buy regardless of the price if they're looking to build up those gold reserves. The last couple of points, Anything you wanted to add before I finish here? Nope. So the last two points here, so Trump.

So the orange man, whatever you want to call him, I know everyone has some strong feelings, whether positive and negative towards Trump. But the reality is whether you like what Trump is doing or you hate him, doesn't matter, is that what he's doing about the Federal Reserve in the U.S. is definitely making markets nervous. So like we talked about last week,

his attacks on the Federal Reserve Board is likely playing a role in this. It's really putting in question the Fed's independence, although it is debatable whether it was truly independent, and I think you can make a pretty strong case that it wasn't regardless, but it's not the fact that it was or wasn't. It's the perception that they're just throwing away the independence from the Fed and the kind of aggressiveness and rhetoric that's happening is likely concerning markets that inflation may pick up rapidly if Trump gets his way. And gold tends to do well in inflationary environment. And especially if there would be less and less incentive, if Trump is

essentially pushing the Fed to do what he wants, well, you can look around the world when people in power are pushing the central bank to do what they want. They typically want to lower interest rates, make money easy because they want the economy to grow. But what that usually do. That usually does. It actually just fuels inflation. So there is a real risk here that you'll see inflation ramp up. And Trump is really starting trying to position the Fed to be very doveish. In other words, be very kind of towards cutting rates, but also doing some quantitative easing to make sure that the long duration bond yields are actually manageable. So they're lower. So that would mean that there would be more and more money.

in the money supply and it would be expanding that and it could also erode investor confidence in the u.s in general because institution have been a big reason why the u.s has been such an attractive place for investors over the last 80 years or so keep in mind in a lot of countries there's capital controls there's not the rule of law the u.s was seen as a place where you could invest your capital whether you were american or not and it was a safe place there were rules in place that would be respected upheld by the courts now there is doubt that that could be eroding so that is another reason here and gold is great because if you own the gold you know and you have a good way to store it there's really not too much the government can do aside from trying to seize it and of course

I know there's been history of that in the US but that would be a pretty extreme case and the last one here that I think is contributing to all of this is just geopolitical uncertainty I mean I don't need to go into too much detail. I mean, we see that happening all around the world. Yeah. I mean, if you look at the run that gold has went on, I mean, it's definitely not just a random run-up and price. I mean, there's definitely a lot of stuff fueling it, especially the risk, the added risk of inflation, because obviously, I mean, it's always typically done well as a physical asset to sort of hedge against inflation. I know there was a lot of data that kind of, you know, over the years said that it didn't really do all that well, like in regards to an inflationary hedge. But I think once we

got that big scale inflation back in 2022, it really started to pick up. And now it's, I mean, it's continuing to cruise here. And as you had mentioned, like the U.S. was often seen as a safe haven in terms of the treasuries, in terms of the equities. I mean, there's a lot of questions around that right now. It's not really, I'm not trying to cause any sort of panic here or anything. But I mean, it's been, It's been very obvious. Trump has been very aggressive in attempting to make change, which obviously, you know, to buy an asset that's, you know, been so stable for so long in gold, a physical asset that you actually own. I'm not surprised to see the demand so high. Yeah, and I think a lot of these tailwinds will continue for the foreseeable future.

Even if the Democrats take power or in other countries, political winds shift, I mean, the reality is politicians are incentivized to space. And that's not going away. And as much as the Democrats are going after Trump and saying he's weaponizing this, not following the Constitution, here and there, and blah, blah, blah. If the Democrats take power,

they'll probably do the exact same thing, but they'll do it in the way they see as being the right way to do it. So I don't see that changing anytime soon. So that's why I think I'm very bullish still on gold. Want to buy a stock, but don't want to shell out hundreds, or even thousands for a single share?

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From stock analysis and earnings report to tariffs and interest rates, the globe's business and investing news help you take action. With tools like CPP, RSP, TFSA, and mortgage calculators, the globe offers a full suite of resources to help you plan, invest, and stay on track no matter where you are on your financial journey. ready to invest in you visit globe and mail.com slash subscribe for unrestricted access at a special introductory rate so the recent data so there's some interesting things too that have shown up so you want to talk us just a little bit about ETF flows I know we were talking about GLD which is I believe the

largest ETF in the world in terms of asset under management they've seen some pretty massive of ETF flows so far this year, right? Yeah, so let me pull up the ticker here again. What is it? GLD, right? GLD, yeah. Yeah, so there has been, so this is a fund with around 111 billion in assets under management. And when we look to fund flows, like just year to date, so it's got around 111 billion

in AUM, it's around 11 billion has flowed into GLD. And just keep in mind that this is only, this is only, this. is like one of the larger funds but this is only one fund of many like in terms of actual money flowing in to all of these gold ETFs it's it's ramping up over the last year or so whereas like i would argue that during well actually no you could see it here so over the last five years glde actually has net outflows so i mean it's really ramping up in recent times that you know gold is starting to become popular again and money is actually flowing back into these funds where even you know during the pandemic when actually there was a lot of you know rumors that gold was going to go to

three thousand dollars an ounce because of all that you know money supply we had zero interest rates zero percent interest like how much money was being spent that you know this would be a long-term tailwind in terms of you know gold prices we didn't really see it up until like the last year or so but even back in 2021, 2022, you had a lot of, you know, a lot of pundits that said like gold has a real chance to go over $3,000 an ounce. And I mean, you look at it, what are we three years later, four years later, and now it's $3,600. Yeah, it's really smashed. And I'm not sure what's causing like people to finally change their mind. I mean, it was really mostly institutions, some investors, hedge funds that were kind of going into the gold trade, but a lot of retail investors,

I mean, most traditional investment portfolios did not include gold or very little in them. So it is interesting that now we're starting to see it a bit broader, but it's still just starting. That's why I think there's still quite a bit of room from gold to go up from here. And what's also interesting is futures contracts that are up for delivery. Now, we'll be talking a bit more about future contracts later. for ways to play gold. Just to be precise, it's pretty risky. And futures contract should really just be if you've done a lot of your own work, you have some pretty substantial financial flexibility. You can't do this futures contract with just a couple thousand dollars. You'll need

more than that. And there's a lot of risk as well. But essentially, these contract allow you to purchase gold at a predetermined price at a specific date when the contract comes up. However, typically there would be a small fraction of these contracts that stand for delivery for physical gold so you could have that contract and when you know the contract comes up you have that set price you could decide just to keep it and take delivery but you have to come up with the actual you know the amount that was agreed and usually it's contract of 100 ounces so you can do the calculation that it would be 360 something 370,000 US for one of those contract but there's also ways to trade these so a lot of people that would trade these they'll do

it on margin so they would just need a fraction of the money to be able to buy those contracts and then they'll even close them out or they'll sell them for a profit to someone else but all that to say that in the past historically there was less than one percent of these contract that would actually stand for delivery so request delivery but there's been reports that upwards of 25 percent of these now in 2025 we're standing for delivery. Sure, there's undoubtedly some tariff-related stuff here, but I would venture to say that there are likely some large individual buyers, some billionaires that are stocking up here, institutional buyers that are opting to take possession of the yellow metal over just having paper claims. Because these contracts, and that is one thing we'll talk

about, a big thing with gold is counter-parity risk. That, you know, there's different levels of risk counterparty is when you're trusting another party with those assets essentially so you're there is a risk associated with that if they don't hold them properly if they lose them whatever it is so there is some counterparty risk so it's been putting pressure on the commodities exchange in the u.s but also draining inventory from the london bullion market so it's been something interesting seeing in 2025 so far yeah 25% delivery is insane that's crazy high like yeah i think it's probably mostly related to tariffs having people trying to get delivery before tariffs kicked in but it's still very high it's i think it's easy to say that it's higher than normal either way

yeah yeah i don't know if people listening this or remember remember back in covid when they had those oil futures yeah at the pandemic hit and then all because there was no demand for oil like all the storage facilities filled up and like oil went negative and my people were having to pay people to take these barrels of oil like a lot of these were were involved with these futures contracts they're uh yeah instead of having to pay for the oil you got paid to take it take it yeah if you had a place to store it because obviously like there was absolutely zero demand like zero demand for oil when we were in global lockdowns and that's why you seen crude like when i think it went to like negative 40 bucks but yeah these futures contracts like we'll talk about them in a bit like this is

going to be for a very very very specific set of people who are very well versed these things. I would, I would, I personally would never touch them myself. So, but it's one way that you can't get exposure. Yeah, I mean, I could probably look at it eventually, but I need at least like a couple of millions. Yeah. In terms of investing money to be able to take small shots at it through that, but it would be something I'd need to learn more about it. But let's talk about some ways to own it. So basically the first one just own physical gold. So there's a ton of places online. where you can buy your gold. I've used Costco. It's great. The advantage with Costco is if you have an executive membership, you get 2% cashback. It applies to gold purchases online. So if you

purchase it with a credit card where you also have some cash back, I mean, you can get 3, 4% cash back depending on your overall purchase. So it is pretty attractive to do that. They have different denominations. They'll have one ounce and they'll have, I think, 1 grams available. So you don't have to buy a one ounce at $3,500 if you want to buy something smaller. You can look at other options online. Just make sure you do your research and they're reputable options and that you know it's a safe one. There's a lot of good ones. I think one in Montreal is called Kitko.

That's pretty good. They're very reputable as well. Yeah, Kitko. So the issue with buying is that you'll have to figure out a storage option. So if you have small quantities, you may be okay with just. storing them at home. Personally, I use the save deposit box route with the bank. I just, I don't have large quantities, but enough that I don't feel comfortable having that in my home. So that is a kind of safety concern. Of course, you're kind of trusting the bank to some extent.

There is some counterparty risk here, but for the most part, I think a save deposit box is a pretty safe route. If you're barging, buying large quantities, and there may be some people that are pretty wealthy here that are looking for large quantities, then there are services that will security hold, securely hold the gold for you in exchange for a fee. If you're using storage, you'll typically want to make sure it's allocated storage. So if you're using, you're buying larger quantities and what it means allocated storage is there are specific gold coins or gold bars that are allocated to your name with the serial number. They're allocated to you. Whereas if it's not allocated, they will likely have the gold for you, but it's basically just in a pool and you have

the claim to one gold bar. It doesn't have to be the exact same that you purchase. It'll just be a claim to gold bar. Typically, best practice is you really want to try and get it allocated to your name. It'll reduce that counterparty risk or at least make sure that you actually have what you paid for yeah the last thing you want to do is them to mess up and the gold actually to not be there i mean i guess that would be if they kind of over allocated but i mean i've never really bought physical gold i mean i i kind of thought about it when it got offered at costco especially like you said like the the cashback rewards and stuff the fact that you get it on on buying gold like and aren't they they they're pretty close to like the spot price in terms of cost they yeah yeah yeah they are usually

So what they'll do, if the price of gold is going up pretty quickly, what you'll notice is they'll sell out very quickly. Yeah. Because people are just buying whatever it was at the lowest price and then they'll repost it. So they tend to have a lot of inventory. It's just they'll repost it. They don't make a lot of inventory. I think that's my perception available at a given price in case there is rapid price movement. So it may sell out, but then maybe within a day later, they'll have it available again at that high.

price. So that's how they do it. But it's usually pretty competitive in terms of that spot price. And then if you add in the factor that you can get the cash back, pretty good. So in terms of the pros and cons here, so it reduces or eliminates the counterparty risk. Of course, that depends whether you store it yourself or save deposit or use a stored option with security. I think Garda services offers that quite a bit. Any of the major kind of worldwide security firms. will tend to have some you can use it at moments notice especially if you have it in your position possession in terms of the cons it's harder to own in a registered account although you can have there's ways to own it in the registered account i think it's a gold certificate yeah i think that's

the way to own it but you can't like have it in your home and claim it's in your tfs you can't do that has to be oh yeah there's specific things you have to follow i've never done it myself but you can but it is a herder. It's not as liquid as other gold investments, such as gold stocks or ETF, can be a security issue if you're holding the gold at home. Fees if you're using a storage option, it's not free. There's going to be fees. The smaller the quantity you purchase, the more of a premium you'll have to pay over a spot

price, which won't be the case for an ETF. You can buy it in pretty small amounts. Transactions can be initiated 24-7 with some online sites, meaning that you can lock a price to buy or sell but it does take some time so that's probably a bit more of a pro here and it is hard to transport in larger quantity i mean if you have a lot of money in your transporting gold or even more so silver uh good luck because you're you're gonna need some special transport for that i would say the biggest issue for physical gold for a lot of people who are looking to buy it would be the liquidity element of it yeah like it's just you know an etf you can go in your brokerage account

you can buy it and you can sell it whenever you want whereas you know physical gold i would imagine it's relatively easy to get rid of but it's not like it's not a process that's a single click of a button yeah no it's true i'll do if you're if you're a doomsday prepper you'll probably want to have some yeah so oh yeah there's much you know there's a lot of benefits to i mean it's the same as it's the same as they say in crypto i mean not your what do they say not your keys not your coins or whatever yeah is that the same so i mean yeah true Bitcoin Air Dan can't over here. So I mean,

welcome to the team. If you're buying an ETF, I mean, not your goal. Like, it's really, it's held in storage held by the fund. So, I mean, it's technically yours because, you know, holding those units does, you know, give you a piece of that gold. But, I mean, it's not in your possession if something were to happen, which, I mean, for the vast majority of these funds, nothing is going to happen. But it's still a potential, which I think is why a lot of people would see the, the physical asset being.

being pretty good. Exactly. So the NTF route is great because you can hold it in registered account. That's probably one of the biggest upsides and the biggest pros here. It's not the same thing as oldening the actual metals since you said the ETF does it for you. So there is some counterparty risk here. Be careful if you choose an ETF that is levered because leverage cuts both ways. If you have a levered gold ETF right now, you're pretty happy. But if gold goes down, you'll feel it on the way down as well the other way around. There are tons of good option out there including a really good one from one of our show sponsor, BMO, it's tickered ZGLD. A quick note here on BMO ETFs, they also did not gold specific, but they did some splits of their most, some of their most popular ETF so that

the dollar price of the ETF is actually accessible to a wider range of investors. So even if you are investing smaller amounts and your brokerage does not offer fractional shares for ETFs, for example while they're doing this to make sure that it's available for more people so they're trying to make it as accessible as possible for canadian and zglde going back to the gold here one of the big things with jd is it is offered in Canadian dollars a lot of these ETFs will be in US dollars so I know obviously it's called the Canadian investor so you may have more Canadian dollars to invest so that is a a good option here now the pros it's easy to purchase it's like purchasing any other ETF. Like I said, easy to own and registered account like TFSA RRSP,

RES, extremely liquid and easy to sell as long as the markets are open. Great way to get exposure if you, even if you have smaller investment portfolio, because, you know, if you're just investing, if you just have $10,000 to invest, buying an ounce of gold, I mean, it's going to be like 35% of your portfolio. So an ETF can give you exposure. and make it a more appropriate percentage of your portfolio. Again, the cons, counterparty risk, we just talked about, can only bought and sold during market hours, at least with physical gold.

You could lock in that price with some online services 24-7. You can initiate the transaction. It will take some time for you to obviously ship the coin, receive the money, and so on, but you can still initiate the transaction and locking that price, whereas you can't, and then the price may fluctuate overnight, for gold and then it's not exactly what you were looking for when the market's open again so it's

always a risk here can be extremely dangerous if you're using leverage and levered gold ETF so you have to be careful here and know what you're doing and you'll have to pay some fees although they tend to be lower than storage options in terms of fees yeah so uh the one thing that i would say with a lot of these the gold funds like the counterparty risk like the vast majority of the funds will just have the gold in storage somewhere. Like I believe BMO just pretty much has a vault. It's probably out of them. It's in Toronto.

Yeah. So the gold, you know, as the assets go up, they will acquire more gold and kind of put it in that, you know, put it in a vault. So the asset is there. There are some situations, which I guess I'll mention a sec here, where it isn't.

But you can look to, there's some interesting things in terms of these gold funds. And the one thing I'll point to is like a Vanek fund. It would be O-U-N-Z. So they actually allow you to take physical delivery of the gold in smaller coins, et cetera, for redemption of your units. There's another one that does that too, and it's the Sprott Fund, but the only thing there is you need 400 ounces.

Like, pretty much, I'm pretty sure you need to buy like a bar before they'll, before they'll deliver physically. So Dan, Dan's okay for his portfolio. Yeah. Yeah, I'm going to get my gold bar soon here. It's a lot of redemption there, whereas I found like Vanek, they do. do they do smaller amounts there's more funds for delivery south of the border than there is here but the other thing is it is highly likely that you know even if you didn't look you would buy a fund

that is backed by physical gold uh that's stored in a vault because we don't really have a lot of what they call synthetic ETFs in terms of gold here in north america but we do have some i believe global x has a gold ETF that is that is synthetic so effectively they won't really hold the gold they'll kind of utilize futures contracts and stuff like that to kind of give you the same price the action as gold without actually holding the asset so I mean personally I wouldn't own one of these I mean the one thing you can do is in some situations you do save on fees because the fund won't have to pay for storage and they won't have to pay for insurance I personally would not touch those I wouldn't either.

You're essentially, you're dealing, you're already dealing with counterparty risk with an ETF, with a regular ETF that would hold the gold. And then you're almost like doubling that risk because you're essentially, you have paper claims. The ETF only has paper claims on gold. That's what futures contracts are. So I personally, I would not touch those with the time. Yeah, that was. Maybe that's my tinfoil at.

No, I wouldn't either. and that's kind of like why I wanted to bring it up is like again I think like Global X is one of the only ones that offers like a synthetic gold ETF but like I would be but if I was buying one it would be one that's actually backed by the by the by the gold and the other thing I guess I'll mention and is a lot of funds these days especially over the last year or so especially the higher yielding type funds they're being created I mean obviously you know a lot of a lot of fund managers kind of go to where the money is and a lot of the money right now is in those higher yielding funds so they've had a lot of like gold covered call ETFs pop up over the last year or so like leverage covered call ETFs things like that um managed fund managers going where the money is yeah hmm yeah so I mean to me especially when you're looking at gold producers if you're investing in these companies which are very high they're in the grand scheme of things they're high risk you need to be

getting the maximum amount of return that you can out of those assets in my opinion considering the risk you're taking on and when you kind of couple that with like covered calls it doesn't really work out all that well especially when you take covered calls and you combine leverage with like companies that have been known to be insanely volatile i just looked up a quick i won't name the fund or anything, but I looked up a cover call fund that was, you know, it started late last year, I think. I mean, conveniently, when gold started getting popular, the covered call fund started popping up. But over the last year, it's underperformed just a basic gold producer index by 35%. So that's in like 10, 11 months. It's returned 35% less. And this would have been you

reinvesting the distributions as well. I think as gold becomes more popular, we're going to see more funds that are financially engineered to kind of do what investors want them to do, whether that be provide a 20% yield or whatever it is. But I mean, to me, if you're going to own the producers or, you know, the physical gold, I wouldn't really try to engineer it in any way to get something out of it that it doesn't provide normally. Want to buy a stock, but don't want to shell out hundreds or even thousands for a single share. With Quest Trade's new fractional shares, you can invest any dollar amount and build a diversified portfolio instantly. No delays, no trade fees, no excuses. Want to put $10 into a stock trading

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where you are on your financial journey. Ready to invest in you, visit globe and mail.com slash subscribe for unrestricted access at a special introductory rate. Well, speaking of gold producers, so gold miners or gold streamers, so that would fall into the category of producers here.

So it provided exposure to gold via the companies that produce it. Excuse me. You can invest in established mining companies as well as junior mining companies and anywhere in between, clearly. The more junior the company, the more risk will be involved depending on what stage of production or they usually will be pre-production. So they might have found some gold deposits,

but they'll need financing to get the production going. So depending, you know, where they're at in their life cycle, you just have to keep that in mind. You can pick individual stocks if you're willing to do the work or pick ETFs. And I know you'll talk about some of the metrics to look at here. Some options here, I'll mention some. If you're looking for a Canadian dollar option, the BMO equal weight global gold index ETF ZGD,

I think it's a great option if you're looking for something that's a balance in terms of weighting and in Canadian dollars. If you're looking for something that's market cap weighted, Vanek GDX is a pretty well-known one. But again, that one will be heavily weighted toward the biggest names. That's the gold miner ETF. Another option would be, again this one would be in US dollars so on the junior minor side

JDxJ from Vanek is a good option this is actually one I own in my portfolio I started the position I think it was maybe a month and a half ago just because the way it tends to play historically in gold is first the price of gold will move and then the miners will follow will have as a whole in the aggregate a bigger move up because they're kind of leverage plays on gold. They have debt to be able to produce gold and so on. But the junior miners will tend to have an even bigger leg up, again, with more volatility along the way, but it tends to happen a bit after the major mining companies as well. So it's still risky, even though it's an ETF, but the way I see it is, you know, the diversification reduces the risk a little bit, even though they're still

junior mining companies and the way I did it was just a small position in my portfolio. I think I started around like 1.5% of my portfolio a bit more than that. But it's done quite well since I bought it. My timing was pretty good to say the least. Yeah, they've junior producers have done quite well. And I think this is kind of the same as like an oil and gas producer. Like often they move higher than the underlying commodity. They track like, you know, if, If oil moves up 20%, it's highly likely that a well-operated producer is going to move up higher than that, but in the event that it slips as well, they tend to drop more than the underlying commodity.

So, I mean, we've seen this with gold a lot, too. Like, gold is up, you know, X, X dollars. The producers are up much more than this. But I think on the producer versus streaming side of things, I think if an investor wants equity exposure to gold, like through a company, I think. this is probably one of the most important decisions you can make, whether you go, you know, the producer or the streaming route. I mean, miners provide much higher risk reward than a streamer. I mean, they tend to have the largest profitability potential because, you know, although operating costs

are variable, they are somewhat predictable. So, I mean, if they're all in sustaining costs are, you know, $1,200 and the price of gold is $2,000, if the price of gold goes to $3,500, they're probably going to keep those operating costs relatively the same from a from a per ounce basis so you tend to see like massive massive increases in profitability among these miners whereas a streamer you know not so much and you just won't see this with a lot of companies that are not commodity focused so like a gold miner can see the price of its end product jump by 30 40 50 percent in like a single year and if its operating costs remain the same like profitability just goes through the roof but if you get imagine, you know, like Apple raising the price of their iPhones by 40% in one year. I mean,

it just doesn't really work that way. Whereas, you know, when they're exposed to the underlying commodity, it's that much more of a jump. And again, this is why you see producers outperform during a bull run and underperform the price during, you know, a bear run. And I mean, we can look to the last gold bear market from, and I believe you pulled up a chart at this. Like, this is Frank. Well, just kind of show the different, yeah, between a gold streamer and a gold miner. Yeah, so before I get into what a streamer does, which it'll make sense after this, we can look to this chart from 2012 to 2019. Now, gold did not do very well over this time frame.

And Barrick, you can see which, I mean, back then, I'm pretty sure it would have been one of the bigger producers in Canada. It lost 41%. And that would have been with reinvested dividends over that time frame, whereas a company like Franco increased by 300%. And that's kind of where you get like the streaming model of the business, which is a lot more consistent and a lot more predictable. So it creates a more consistent revenue stream because the operating costs are pretty much next to nothing. I'm pretty sure Franco Nevada has like 90% EBIT of margins.

I think like. Yeah, I mean, even right now they're kind of their gold, their price per gold downs that they're paying for. I think it's like 300 bucks or something. I'm just going on memory, but it's like, yeah, it's around like three, four hundred. dollars tops it's been increasing a little bit but you know take a moment and think about that three four hundred dollars and the price of gold is trading above 3500 usd i mean these are massive margins and you can also think about it the other way around what if the price of gold went down 50% and it was it would be 1750 roughly 1800 they would still be very profitable whereas a gold

miner their cost their overall costs would be much higher than that and if gold drop by half a lot of even the big gold mining companies would either be barely profitable or just losing money with such a drop so that's that's the biggest difference yeah yeah and the way the way like sorry the way franco nevada can do this is it effectively it's a top line royalty company like for the most part it will take a chunk of revenue or in the case of streaming it kind of agrees to buy price of gold at like predetermined prices but if we just think of the royalty aspect of it it's not exposed to any of the operating costs so i mean if if you think of like this is in very basic numbers here like say company sells an ounce a gold for three thousand dollars and franco has a 10% royalty on that it will take three hundred dollars it doesn't matter if it costs that gold company $1,000 to get it out of the ground or $3,000 to get out of the ground. Like, they kind of get their cut.

And in turn, what they do is they provide financing to a lot of these mining companies to kind of run their operations. But in the event that gold were to fall, say, like you said, 50%, a lot of these gold producers' margins would just be, well, I mean, obliterated. Really, if you look at, like, if we're at $3,500 an ounce right now and it cuts in half to $7.7. And, you know, a gold producer has all in sustaining costs of, say, $1,400 an ounce. I mean, their margins are like a fraction of what they were. So profitability takes a massive hit. Whereas a company like Franco, there's still, you know, those costs will be relatively. They'll still take a hit for profitability, but still be very profitable.

They're just, they're just like, that's profitable. Yeah, they don't have, they don't have those heavy margins. And I mean, it's not going to be impacted. Profitability will be impacted, no doubt. not as high. So it creates a more consistent revenue stream. And I mean, in the, you know, the way the industry works, I mean, gold is high right now, but there's like, it's a matter of, of when, not if, you know, it does dip and a lot of these producers will take a hit. Like, it's inevitable. It's just kind of difficult to, you know, predict when. We've seen it in the oil and gas industry numerous

times, like a lot of these commodity based companies, whereas, I mean, again, look to this chart, gold like what did it do yeah lost from 2012 to 2019 it lost 7.1 percent and frico nevada went up 300 pretty much and a company like barrack got obliterated really 41 percent negative returns over the course of nine years that's that's pretty bad yeah exactly so it i mean there's a reason why they trade at a premium but and you won't you've done better owning the miners over the last year than you have owning Franco, yeah, exactly, then owning Franco Nevada. Like the miners have moved much more than a streamer like Franco Nevada. But again, if there is a pullback of some sort, Franco Nevada will likely do better than the miners. And if it keeps going up, you'll still have

some very nice returns. But again, the miners will end up doing much better. Anything else to add there before we kind of close things up since we only have about five minutes left? No, I mean, I guess the only thing that I would say is yeah like I prefer the streaming route which is why I own Franco I mean the producers way more upside but way more volatility which is why I just I mean Franco kind of a set and forget yeah exactly so I kind of like I said I owned the GDXJ the junior minor ETF just a small allocation I own Franco Nevada better bigger allocation and then ETFs and physical gold as well so I own all of the above now in terms of the above now in terms of other ways to play it we touch about gold futures so won't really go back all that much

on that we did explain to it gold option is also something that people can do it similar to buying stock options but you can buy calls or puts for gold as well you can also do it for ETFs that are gold ETF so you'd be able to do that now the last one that's kind of probably new to a lot of people is gold back tokens so I'm talking about the blockchains I'm talking about crypto here Things like PXAG or XAUT are tokens tied to the price of gold. You can buy just a fraction of one token given you exposure to cold. Each token, for the most part, the ones I looked at, they're worth the price of an ounce of gold. But you can buy fraction, like I said.

The issuer keeps those token backed by physical gold. Whenever you don't gold, like it's just like an ETF, right? you don't own the gold physically so there are third party risk or counterparty risk there's also there are some pros and cons here i'll just kind of rifle through them quickly so we can finish this episode since we have a meeting to 10 after this dan and i the pros it's as easy to purchase as like if you have experience purchasing crypto it'll be very easy for you like it won't be hard it'll be just like buying any other cryptocurrency that you bought whether it was ethereum coin or any other cryptocurrencies out there it's extremely liquid and easy to sell it's the most

liquid bar none like this is the most liquid way if you want gold exposure you can sell it 24-7 there's no option that comes close to that so if that's your main concern and you're willing to learn how it works then you obviously do your due diligence but it would be the most liquid it can be bought in very small quantities. Now, there are a slew of cons here. Counterparty risk, like I mentioned, you're trusting the token issuers, given that it's a relatively new type of investment, I would see the counterparty risk as being definitely higher than ETFs because the regulation is still a bit uncertain. There's a lot of regulatory uncertainty there. You'll likely pay some fees depending on the token use plus a transaction fee when making the purchase or the sell on the blockchain, so

Most of them are on the Ethereum blockchain, so you'd pay a gas fee. These can vary depending on the usage and the demand for using the blockchain at that point in time. It's not TFSAR-RSP eligible. There are blockchain and technical risk, and it is a steep learning curve if you've never traded crypto before. So that is probably one of the biggest downside is if you never dealt with crypto before. It's a pretty big learning curve on how to do it, but also how to store your keys privately, securely, and the different, I guess, risk that you can have

versus owning it on an exchange versus self-storage or cold storage. Yeah, I didn't even know these existed. That's interesting. When did they start? A little bit a few years ago. So it's not, I had heard of them, never really looked into them. And then when we were doing our research for this, I kind of started looking.

And yeah, no, there's quite, a few of them i can uh share my screen here they'll make a bit more stance here so which uh let's pick one here su uh pax g uh i think you're still sharing the the fin chat yeah i'm gonna okay share this tab so there you go oh yeah so it is the price of gold i'm looking at max so this one would have yeah late 2019 so it's been oh so they've been around for a while yeah yeah it's interesting i mean i would personally never touch them just because i don't really know i mean yeah i've never bought like you would need to know as you mentioned like how to buy crypto and navigate this thing but um yeah it seems interesting i mean especially because it's 24

it turns it into 24-7 trading really yeah exactly i think that's the most compelling argument for a go-back token is you can buy it and sell like he it's the most liquid like there's that is the one argument for it like i'm sorry but show me an option that's more liquid than that and there's none so that is the one that if you need that money quickly and it kind of goes to bitcoin right like whenever we see big drops in the stock market in a given week let's say start of the week or when we saw like liberation day and all that stuff when you started coming out like the moves will happen especially if there's news on the weekend you'll see bitcoin like say if it's a big move downwards it will tank first because it's basically the only thing that's major asset that's liquid

on the weekend and then you see like once regular trading opens the following day you'll actually see it you know stocks will be down gold might be down other assets will be down but it is it is one of the i guess biggest pros but also you know i guess downsides whether you know you get these big movements when the rest of the market is closed but if liquidity is a thing there's it is the top asset for that yeah definitely i mean it's good tech not i don't understand it very well but i mean yeah i mean to be able to buy and sell it at any point much like crypto but i mean i yeah i own crypto ets so you give up or bitcoin ets sorry so you give up that liquidity there but i just don't understand well enough to ever ever dive into actually buying them yeah no i think this is a good point

to close things up. We gave some ticker ideas for people to do their research. Of course, these are just ideas. Make sure you do your own research. I'll finish this with, you know what, gold just hit a new all-time high. It's 3575. It's just been crazy just to watch. I mean, in all fairness, it was training sideways for probably a better part of like two, three months. Yeah. Yeah, if you're like just as we're looking for the chart here. Yeah, like literally had like a big chunk like since like mid-April up until just a let's say a week ago roughly it was trading between a range of probably like 3,200 and 34 so it was kind of trading within that range but again if you helped it beyond that date you've done quite well especially if you've owned it for the last couple years or even

the start of this year you've done pretty well with pretty much any of the options we've talked about in terms of getting exposure to gold, not just gold itself. Yeah, you've probably done the best with the producers, I would say. Like a lot of them are just crazy. Like even Agniko, like is pretty much wiped out. It's like net cash positive. It's just nuts. Yeah, some of the big producers, I mean, I think they've doubled over easily over the last year.

So you've done. So if you've been patient and or just decided to kind of start building a position the last year, like congratulations, you've done pretty well. Yeah. So we'll call it that. Thanks again for everyone. We really appreciate the support. Thanks for listening to us. We will be back this Thursday for a news and earnings episode. As a reminder, we recorded this on September 3rd at around 2 p.m. Eastern time, one to two. So if there's some big changes in the price of gold, if it's $2,500 by the time you listen to this, just remember that that's when we recorded it. So thanks again for listening. We'll talk to you on Thursday. or podcast should not be construed as investment or financial advice. The host and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.