With all the uncertainty and volatility in the market right now, especially with the growing risk of a global trade war, it’s no surprise to see the price of gold hitting record highs.
In fact, just yesterday, the price of gold again surged to a new all-time high, climbing past $3,300 per ounce, and the rally shows no signs of slowing down.
Between escalating tensions over tariffs, fears of a broader economic slowdown, and a wave of risk-off sentiment across global markets, investors are once again turning to gold as their safe haven of choice.
However, this time, it’s not just a short-term panic move. Analysts are pointing to strong fundamentals behind the rally, including significant central bank buying, steady or falling interest rate expectations, and growing demand from both institutional and retail investors.
So, if you’re looking to shore up your portfolio and add exposure to gold as both volatility and uncertainty continue to rise, here are the best ways you can gain exposure.
Source: Getty Images
Top Canadian gold stocks can give you leverage over the price of gold
If you’re looking to gain exposure to gold as the price continues to rise, buying a high-quality stock can offer many advantages.
While there are several gold stocks to choose from on the TSX, two of the largest and most diversified gold producers are Barrick Gold (TSX: ABX) and Newmont (TSX: NGT).
Gold producers are a popular investment when looking for exposure to precious metals because they offer built-in leverage to the price of gold since their earnings and share prices can rise significantly more than the metal itself when prices increase.
For example, if it costs $2,000 for a gold stock to produce an ounce of gold, and the price of gold is at $3,000, then each ounce it produces will net a profit of $1,000.
However, if the price of gold increases by just $100 to $3,100, that’s an increase of just 3.3% in the price of gold. At the same time, though, the gold producer will see a 10% increase in profit per ounce.
While there are many gold stocks to consider on the TSX, a large, well-established producer like Barrick or Newmont offers many advantages.
For example, because they have diversified operations across multiple mines and regions, it lowers the risk of production issues, political instability, or cost overruns at any one site.
In addition, these large-cap stocks (both of which have market caps upwards of $50 billion) typically have stronger balance sheets, better access to capital, and more consistent cash flow.
So, if you’re looking to gain exposure to the precious metal as the price of gold continues to rally, Newmont and Barrick are two of the best stocks to buy now.
Two top gold ETFs
In addition to buying gold stocks, another way to gain exposure is through an ETF such as iShares S&P/TSX Global Gold Index ETF (TSX: XGD) or the SPDR Gold Trust (NYSEMKT: GLD).
The XGD ETF owns a basket of gold-producing stocks. So, much like Barrick of Newmont, it offers more leverage to the price of gold but with even more diversification. Meanwhile, instead of owning gold stocks, the GLD ETF owns physical gold bullion.
That means the XGD will be a more volatile investment. Since it owns stocks which offer leverage to the price of gold, it will see bigger swings to the upside when the price of gold increases. However, it will also see sharper declines if gold prices fall.
For example, year-to-date, the price of GLD has gained roughly 23%. Meanwhile, the price of the XGD ETF is up by more than 46%, increasing at roughly double the pace.
This outperformance shows the leverage that gold stocks can provide during a rally. Of course, the opposite can happen during a downturn, with mining stocks typically falling harder than the underlying commodity.
So, deciding which ETF to buy ultimately comes down to your risk tolerance and whether you’re looking for steady exposure or a more aggressive play on the price of gold.
One thing’s for sure, though: with uncertainty remaining elevated and gold prices continuing to reach new highs, the precious metal could certainly be one of the best investments of 2025.
