Gold exports mask weakness in Canada’s broader trade picture

Canada posted a C$583 million ($421 million) trade deficit in October, but surging precious metal exports — mostly gold — are doing a lot of heavy lifting. Strip those out, and Canada would have a C$8.2 billion shortfall.

The gap underscores how the country’s trade fortunes have become more dependent on global demand for bullion.

Gold prices have jumped as investors flock to safe‑haven assets due to rising geopolitical uncertainty. The rally is boosting the value of Canada’s precious metal exports, with shipment volumes growing too — just more slowly than prices. That’s helping steady Canada’s export performance even as US tariffs squeeze Canadian industries and weigh on global growth.

Strong gold shipments to the UK pushed Canada’s overall exports to non‑US countries to new heights in October. The share of Canada’s exports bound for the US fell to a record low, outside of the pandemic period.

“As of October, precious metals (unwrought + alloys) made up roughly 13% of Canadian exports,” Bank of Montreal economist Shelly Kaushik said in a note.

“For the first time on record (or 1997), that’s more than exports of oil or autos. Those two traditional heavyweights have, of course, been under pressure from lower prices and higher trade tensions, respectively. While Canada’s trade flows will continue to face headwinds amid geopolitical uncertainty, gold will remain a stalwart as long as prices hold up.”

(By Mario Baker Ramirez)