Decided to check in on financial matters this morning. Yes, the Canadian dollar is doing
well with respect to the USD, but not so much with respect to other currencies. And since we
are not expected to buy US goods, some might want to think differently about the situation.
https://ca.finance.yahoo.com/news/why-canadian-dollar-missing-currency-182912364.html
and then, how long might this advantage with respect to the American currency last...
* * *
Gemini:
How are gold and silver trading recently?
Key Drivers Behind the Trading Activity
The Fed Factor: Stronger-than-expected US jobs data (130k new jobs) released recently has pushed expectations for interest rate cuts further into the year (now eyeing July instead of June). This usually weighs on gold, but safe-haven demand is keeping prices afloat.
The Gold-Silver Ratio: This ratio recently swung from a multi-year low of 44 (meaning silver was very expensive relative to gold) back up to over 60. This suggests the market is "normalizing" after silver's speculative frenzy in January.
Geopolitical & Structural Support: Despite the price drops, central banks continue to accumulate gold at record levels. Analysts at JP Morgan and BofA remain bullish, with some 2026 year-end targets for gold still sitting between $5,500 and $6,000.
What’s Next?
Traders are currently watching the $5,138 resistance level for gold. A break above that could signal a return to the all-time highs, while silver needs to clear $84 to regain its previous momentum.
Note: The current volatility means "paper" prices (futures) and "physical" prices (bars/coins) have occasionally diverged, with physical premiums remaining high due to strong retail demand.
Would you like me to look into specific mining stocks or ETFs (like GLD or SLV) to see how they are reflecting these price moves?
What is an ETF?
Think of an ETF (Exchange-Traded Fund) as a "basket" of different assets—like stocks, bonds, or commodities—that you can buy and sell on the stock market just like a single share of a company.
Instead of buying 50 different tech stocks or 10 different types of gold bars, you buy one share of an ETF that holds those things for you.
How an ETF Works
Feature Description
The "Basket" An ETF can hold hundreds of assets (e.g., the S&P 500) or just one specific asset (e.g., Physical Gold).
Trading Unlike Mutual Funds, which only price once a day, ETFs trade all day long on exchanges like the NYSE.
Diversification It allows you to spread your risk. If one company in the basket fails, the others can keep the fund stable.
Cost They are generally cheaper than Mutual Funds because they are often "passive"—they just track an index rather than having a manager picking stocks.
The Main Types of ETFs
Stock ETFs: These track a specific index (like the S&P 500) or a sector (like AI, Green Energy, or Healthcare).
Bond ETFs: These provide a way to invest in government or corporate debt.
Commodity ETFs: This is how many people trade gold and silver. Instead of storing heavy metal in your basement, you buy an ETF like GLD (Gold) or SLV (Silver) that represents ownership of the metal held in a vault.
Inverse/Leveraged ETFs: These are "betting" funds designed to go up when the market goes down, or to double/triple the daily move of an index. (Warning: These are high-risk!)
Why People Use Them
Lower Barrier to Entry: You can buy a "piece" of the entire gold market for the price of one share (currently around $460 for GLD), which is much cheaper than buying a 1oz gold bar.
Liquidity: You can sell your position instantly during market hours.
Transparency: You can see exactly what assets the fund holds every single day.
The Catch: Since ETFs are managed by companies (like BlackRock or Vanguard), they charge a small annual fee called an Expense Ratio. Usually, this is very low (e.g., 0.03% to 0.40%), but it's something to keep an eye on.
Would you like me to compare a few specific Gold or Silver ETFs so you can see how their fees and performance differ?
I am in Canada. Do I have access to any ETFs or are these particular to New York?
You definitely have access! Being in Canada, you actually have two main ways to buy ETFs. You can buy them directly on the Toronto Stock Exchange (TSX) in Canadian dollars, or you can use your Canadian brokerage account to buy US-listed ETFs on New York exchanges (NYSE/NASDAQ) in US dollars.
Here is the breakdown of your options:
Why choose one over the other?
Convenience: Canadian ETFs (like CGL) are better if you just want to use the CAD sitting in your bank account.
Liquidity: US ETFs (like GLD) are much larger. If you are trading millions of dollars, the "bid-ask spread" is tighter in New York.
Taxes: If you hold US-listed ETFs in a TFSA, the US government will take a 15% withholding tax on any dividends. However, if you hold them in an RRSP, they are generally exempt from this tax due to a treaty.
A Pro-Tip for Canadians: "Hedging"
When you look at Canadian gold ETFs, you’ll see some are "Hedged" and some are "Unhedged."
Hedged (CGL): You only care about the price of gold. If gold goes up 5%, your ETF goes up 5%.
Unhedged (CGL.C): You are betting on gold and the US Dollar. Since gold is priced globally in USD, if the US Dollar gets stronger while you own gold, you actually make an extra profit when you convert back to CAD.
Would you like me to explain how to buy these within a TFSA or RRSP to minimize your taxes?
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