All that glitters

There are three factors at play here: prices, volumes, and repatriation of foreign reserves. A sizable chunk of the gains has been driven by record-breaking global gold prices*, while volumetric increases have been more modest.

Lastly, there is the ongoing trend of European central banks moving gold reserves out of the United States and Canada on the basis of improving crisis preparedness, easier market access, risk dispersion, and reducing exposure to rising global tensions.

Bottom line: Recent gold price movements reflect a “tug-of-war” between short-term political swings, the expected path of interest rates, and rising concerns over unsustainable debt burdens that show no signs of shrinking. Going forward, structural forces should support gold prices long term, while news and data releases that bolster the case for rate hikes will cause shorter term price swings. Either way, the value of gold in the global financial system should not be understated.

*Statistics Canada monthly import and export price and volume indexes only report on gold, silver, and platinum as a group rather than individually.

Answer to the previous trivia question: According to Wikipedia, the first "free" school (which would now be called a public school) in what is now Alberta, was established in the Hamlet of Edmonton in 1881.

Today’s trivia question: Which country holds the highest gold reserves in the world?

A safe haven, sometimes

Gold’s response to the Iran war is a useful case study in how “safe haven” behaviour can get complicated. When conflict initially erupted at the end of February, gold prices barely moved and March was the weakest month for the metal since 2013, even as geopolitical uncertainty remained elevated.

But why didn’t gold rally as it did when uncertainty and geopolitical tensions last peaked? One of the byproducts of the war and its escalation was higher oil prices, which raised inflation concerns, which in turn raised the odds of a Fed rate hike. The U.S. dollar also strengthened as it assumed the role of the safe haven asset of choice. Both effects worked against gold.

The longer-term story hasn’t gone away

Gold found a fresh, if temporary, tailwind last month. With U.S. federal debt having just crossed US$40 trillion and long-dated Treasury yields sitting near multi-year highs, Treasury Secretary Scott Bessent announced buybacks of 10-to-30-year debt to help suppress yields. Yields on the long-end initially fell, the dollar softened, and gold jumped about 3% to push past US$4,500.

The intervention provided some short-term relief, but it did little to resolve the reason why yields were rising in the first place.

This creates a “tug-of-war” for gold. The structural case is still intact: record debt loads, a Treasury concerned with its borrowing costs, and central banks consistently being the main buyers of gold. But the cyclical case has become less friendly towards gold. Pulling the other way, a more hawkish Fed under new Chair Kevin Warsh, combined with recent resilient U.S. jobs data, has markets pricing a 60% chance of a rate hike this month. Since gold is a non-interest-bearing asset, rising real yields raise its opportunity cost and explains much of the pullback from its recent peaks.

Canada’s export story

After significant advances last year, gold has been playing an even larger role in Canada’s export story in 2026. Canada’s recent trade data shows a historic spike in gold exports overseas.

Canadian exports to the United Kingdom are up about 94% compared to the first seven months of last year, while Canada exported almost $1.5 billion in gold to the Netherlands in June, despite not having exported a dollar of gold to the country in the last 24 months.