With the Trump Administration threatening new tariffs against Canada until we get our house-in-order, many Canadians are wondering and worried about how this may impact their immediate financial situation.
With tariffs placed on certain Canadian goods and services, one of the biggest impacts could likely be a weakening Canadian dollar - which has been already quite weak as you know if you recently exchanged CAD dollars for USD. A weakening dollar would drive up the cost of goods and reduce purchasing power. In times like these, owning physical gold and silver becomes an essential wealth protection strategy.
Why Precious Metals Make Sense for Canadians
Hedge Against a Falling CAD – Precious metals are priced in USD, meaning that if the Canadian dollar continues to weakens due to tariffs, gold and silver prices in CAD will rise. Even if gold stays at $2,000 USD per ounce, a drop in the CAD from 1.35 to 1.45 per USD would push gold from $2,700 to $2,900 CAD per ounce—just from currency movement alone.
Protection Against Inflation – Tariffs could increase the price of goods imported from the U.S., leading to inflation. Gold and silver have historically acted as safe-haven assets during inflationary periods, preserving wealth when fiat currencies lose value.
Safe Haven During Economic Uncertainty – Trade uncertainty and tensions can slow economic growth and lead to lower interest rates in the short term to help stimulate a weaker economy, weakening the CAD further. Often, the government cranks up the money printing as well in its fiscal stimulus bag of tricks however this only leads to higher inflation down the road. In both cases, physical precious metals provide a stable, long-term store of value when markets are uncertain and the economy is floundering which is where we are at in Canada right now.
What Could You Do Today To Protect Yourself?
If tariffs are implemented, the impact on the Canadian dollar and economy could be significant. The best way to prepare is by diversifying your wealth with physical precious metals. Given all of the reasons above, holding your wealth in fiat dollars during these times will likely not help you navigate these trooubled waters. What will can be swapping dollars for real assets and real money such as physical gold and silver.
My Final Thoughts
If/when tariffs make everyday life even more expensive, owning some physical gold and silver can be a smart way to protect your finances. Whether it’s shielding your hard-earned savings from inflation, hedging against a weaker Canadian dollar, or simply having an asset that holds its value, over time, physical precious metals provide a financial safety net in uncertain times.
If you’re new to precious metals, now is a great time to learn how they can help you stay ahead—no matter what’s happening with trade policies.
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