Top Canadian Gold ETFs for March 2025 and Beyond

ByMathieu Litalien Published On:

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        Key takeaways

        Gold as a Safe Haven – These ETFs provide exposure to gold, a traditional hedge against inflation and economic uncertainty.

        Diverse Approaches – Some ETFs hold physical gold, while others invest in gold miners or use covered call strategies.

        Currency Impact Matters – Hedged vs. non-hedged options allow investors to manage exposure to USD fluctuations.

        One ETF I like way better than the ones on this list.

        Canadian exchange-traded funds (ETFs) revolutionized passive investing in Canada. Forget about the hassle of picking individual stocks. Now, a laid-back strategy with ETFs works wonders.

        ETFs are also an excellent way to gain exposure to particular industries without having to pick individual stocks.

        A piece of investment advice I often give (an investment strategy used at your discretion) is that every portfolio should have some exposure to gold. Gold has long been considered a defensive investment and helps insulate your portfolio against various market conditions, potential bear markets, or market volatility.

        Some investors buy bonds, or even Canadian bond ETFs, for stability, which isn’t a wrong decision either. But in a rocky market in terms of interest rates, bonds will be more volatile.

        But if you’re looking for exposure to gold without having to own a producer, streamer, or the precious metal directly, you may look to an exchange-traded fund. I’d imagine that is exactly why you’re on this post.

        Lets dive into the best gold ETFs in Canada right now. I’ll try to mix this list up a bit, having a wide variety of ETFs that give investors exposure to different parts of the industry.

        So what is the best gold ETF in Canada moving forward in 2025?

        Direct gold exposure with CAD hedging

        iShares Gold Bullion ETF (CAD-Hedged) (TSX:CGL)

        This ETF holds physical gold and uses currency hedging to neutralize fluctuations in the Canadian dollar relative to USD. It aims to provide investors with a pure gold price return in CAD terms.

        • Direct ownership of physical gold – Provides exposure to gold prices without investing in mining stocks.
        • Currency hedge reduces volatility – Protects Canadian investors from USD movements.
        • Inflation hedge & safe-haven asset – Gold is a historical store of value during economic downturns.
        • No reliance on mining companies – Avoids operational risks tied to gold producers.
        • Interest rate trends – Lower rates typically boost gold prices.
        • Geopolitical instability – Increased demand for gold during crises.
        • Central bank policies – Gold reserves and monetary easing impact demand.
        • Gold price volatility – Prices can be unpredictable.
        • Hedging costs – Currency hedging may not always be beneficial.
        • No income generation – Unlike stocks, gold does not provide dividends.

        Direct gold exposure without CAD hedging

        iShares Gold Bullion ETF (Non-Hedged) (TSX:CGL.C)

        Similar to CGL, this ETF holds physical gold but does not hedge currency risk. This means returns are impacted by both gold prices and CAD/USD fluctuations.

        • Pure gold exposure – Tracks gold price movements in USD.
        • Potential currency advantage – A weakening CAD boosts returns.
        • Inflation and crisis hedge – Gold performs well in uncertain times.
        • No reliance on mining firms – Direct commodity investment avoids operational risks.
        • Canadian dollar fluctuations – A falling CAD enhances returns for Canadian investors.
        • Inflationary pressures – High inflation increases demand for gold.
        • Central bank gold reserves – More purchases can drive prices higher.
        • Currency exposure – A strong CAD can erode gains.
        • Gold market fluctuations – Driven by global economic sentiment.
        • No dividends or yield – Strictly a capital appreciation play.

        Exposure to global gold mining stocks

        iShares S&P/TSX Global Gold Index ETF (TSX:XGD)

        This ETF tracks the S&P/TSX Global Gold Index, offering diversified exposure to gold mining companies worldwide. It provides leverage to gold price movements through miners’ profitability.

        • Leverage to gold prices – Miners tend to amplify gold price movements.
        • Global diversification – Exposure to Canadian, U.S., and international mining firms.
        • Potential for dividends – Some mining stocks pay dividends, unlike physical gold.
        • Cyclical opportunities – Miners can outperform in gold bull markets.
        • Gold production costs – Rising costs can impact mining profitability.
        • M&A activity in the sector – Consolidation could create stronger players.
        • Commodity cycles – Gold miners benefit during commodity booms.
        • Operational risks – Mining firms face production and geopolitical risks.
        • Stock market correlation – Mining stocks can decline even if gold holds steady.
        • Management decisions – Poor leadership can erode shareholder value.

        High-growth junior gold miners

        BMO Junior Gold Index ETF (TSX:ZJG)

        This ETF focuses on small-cap gold mining companies, which offer high growth potential but come with increased risk. It tracks the Solactive Junior Gold Miners Index.

        • High-reward potential – Junior miners can deliver explosive growth.
        • Exploration upside – New gold discoveries can significantly boost stock value.
        • M&A target potential – Large miners often acquire juniors to expand reserves.
        • Pure play on gold mining growth – Focused exposure to emerging mining companies.
        • Exploration success rates – More discoveries can drive sector gains.
        • Gold price fluctuations – Juniors are highly sensitive to price movements.
        • Capital access for miners – Funding availability impacts growth.
        • Higher volatility – Junior miners are riskier than established producers.
        • Liquidity concerns – Smaller stocks may be harder to trade.
        • Exploration failure risk – Not all mining projects succeed.

        Gold exposure with income generation

        Horizons Gold Yield ETF (TSX:HGY)

        This ETF provides gold exposure while generating income through covered call options on gold stocks. It’s designed for investors who want exposure to gold with some cash flow.

        • Gold exposure with yield – Covered calls generate income on gold investments.
        • Reduced volatility – Option strategy lowers risk compared to pure gold holdings.
        • Steady cash flow – Ideal for income-focused investors.
        • Diversification – Combines gold investments with an options overlay.
        • Volatility in gold prices – Higher volatility benefits options strategies.
        • Interest rate trends – Low rates enhance demand for gold-related income products.
        • Demand for yield – Investors seeking income alternatives may be drawn to covered call ETFs.
        • Limited upside – Covered calls cap potential gains.
        • Gold price sensitivity – If gold falls sharply, losses may still occur.
        • Complex strategy – Not a pure gold investment, requires understanding options.

        Direct physical gold exposure

        BMO Gold Bullion Series Units ETF
        TSE: ZGLD

        Launched on March 8, 2024, the BMO Gold Bullion ETF (ZGLD) invests directly in unencumbered gold bullion, specifically 400 troy ounce international bars. The fund seeks to mirror the performance of gold bullion prices, providing investors with a straightforward means to gain exposure to gold without the complexities of purchasing and storing physical gold.

        • Physical Gold Holdings – ZGLD holds physical gold bars stored in secure, audited vaults, offering investors confidence in the tangible assets backing their investment. bmogam.com
        • Inflation Hedge – Gold has historically served as a hedge against inflation. By investing in ZGLD, investors can potentially protect their portfolios from the eroding effects of rising prices.
        • Portfolio Diversification – Incorporating ZGLD into an investment portfolio can enhance diversification, as gold often exhibits low correlation with traditional asset classes like equities and bonds.
        • Liquidity and Accessibility – As an exchange-traded fund, ZGLD offers liquidity and ease of access, allowing investors to buy or sell shares on the Toronto Stock Exchange during regular trading hours.
        • Professional Management – Managed by BMO Global Asset Management, ZGLD benefits from professional oversight, ensuring that the fund’s assets are handled with expertise and in accordance with its investment objectives.
        • Gold Price Movements – Monitoring global economic indicators, such as inflation rates and currency fluctuations, can provide insights into potential gold price trends, directly impacting ZGLD’s performance.
        • Central Bank Policies – Decisions by central banks regarding interest rates and gold reserves can influence gold prices. Investors should stay informed about monetary policy changes.
        • Geopolitical Events – Political instability and global conflicts often drive investors toward safe-haven assets like gold, potentially affecting the demand and price of gold.
        • Currency Exchange Rates – Since gold is typically priced in U.S. dollars, fluctuations in currency exchange rates can impact the value of gold investments for Canadian investors.
        • Market Volatility – Gold prices can be volatile, influenced by various economic and geopolitical factors, leading to potential fluctuations in ZGLD’s value.
        • Higher Expense Ratios – Gold ETFs, including ZGLD, often have higher management fees compared to traditional index ETFs, which can affect net returns over time.
        • Currency Risk – As gold is priced in U.S. dollars, Canadian investors may face currency risk. Changes in the CAD/USD exchange rate can impact the value of the investment.

        Gold is regaining favor again, and is one of the best performing assets over the last few years

        Before the COVID-19 pandemic, gold had fallen out of favour, trading in a 5+ year bear market with prices hovering anywhere from $1000-1200 USD an ounce. Now? government spending and higher inflation is causing a surge in gold prices, and many predictions during the pandemic of $3000/oz gold are now coming true.

        So where should one invest? Investing in individual gold producers can be difficult, risky, and not suggested for those with a low-risk tolerance. There are a plethora of small, mid, and large-sized gold stocks, and it’s not easy picking the winners.

        As we’ve seen in the past, investors who buy the wrong gold producer or explorer can lead to significant losses. Gold companies set up for long-term success are a rarity, and most investors lose money when they get into precious metals or the companies that mine them.

        Investing in a Canadian gold ETF greatly increases your exposure to the precious metal while minimizing your risk.

        Ultimately, the performance of these ETFs will depend on the price of gold, but for investors looking for lower risk, an ETF inherently won’t be as volatile as buying individual stocks on the stock market.

        Keep in mind, however, that with any ETF, you should be looking for a blend of low cost and high returns. Mediocre ETFs with high expense fees can eat into returns over the long term and cause you to underperform the market significantly.

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