Gold prices have shown signs of stabilizing after another volatile week, but silver continues to struggle as higher interest rates and a stronger Canadian dollar weigh on precious metals markets.
Early trading Thursday, Oct. 29, placed gold near C$5,660 per troy ounce, while silver was trading around C$75. Both metals remained below the levels reported by Canadian Coin News a week earlier, although gold recovered some of its losses after briefly slipping below US$4,000 (C$5,600).
In U.S. dollars, gold was trading around US$4,041 (C$5,650) early Thursday, while silver stood near US$53.34 (C$74.58). According to market data published by SpotPrice.ca, gold had declined approximately two per cent over the preceding week, while silver had fallen more than seven per cent in U.S.-dollar terms.
The latest figures extend a period of considerable volatility that began with a sharp selloff in mid-October. When CCN reported on the market Oct. 22, gold was trading near C$5,810 and silver around C$80.26. Compared with those early-morning quotations, the latest prices represent declines of approximately C$150 for gold and C$5.26 for silver per ounce.
Gold’s performance during the past week has been uneven. Prices weakened late last week, briefly falling below US$4,000 (C$5,600) before recovering during trading on Oct. 26 and 27. By Wednesday, Oct. 28, gold had climbed back above US$4,060 (C$5,699), although the recovery remained insufficient to erase the earlier losses.
Silver has experienced a more pronounced decline. The metal, which often experiences larger percentage swings than gold, remained under pressure throughout much of the week. Its weaker performance has also pushed the gold-to-silver ratio higher, approaching 76 ounces of silver for every ounce of gold.
A significant development came Wednesday when the Bank of Canada raised its benchmark interest rate by a quarter of a percentage point to 2.5 per cent, its first increase in more than three years.
The central bank cited persistent inflationary pressures, including elevated energy prices, and warned further increases could be necessary. It expects Canadian inflation to rise to approximately 3.5 per cent by the end of 2026.
Higher interest rates can create challenges for precious metals because gold and silver do not generate interest income. When yields on interest-bearing investments increase, the relative appeal of holding bullion can diminish.
The Canadian dollar also strengthened following the Bank of Canada’s announcement, adding another consideration for Canadian investors and collectors.
Reuters reported the loonie rose approximately 0.3 per cent Wednesday to 71.43 cents US, with one American dollar worth about C$1.40. The currency’s recovery followed several weeks of fluctuations as investors assessed the outlook for interest rates, inflation and economic growth.
Because precious metals are priced internationally in U.S. dollars, a stronger Canadian dollar can reduce their value when converted into Canadian currency. This means Canadian bullion holders can experience declines even when international metal prices remain relatively stable.
The Bank of Canada’s decision coincided with an announcement from the U.S. Federal Reserve, which left its benchmark interest rate unchanged. Investors are continuing to assess the possibility of further monetary tightening as central banks attempt to contain inflation without significantly slowing economic growth.
For Canadian coin collectors, the latest market movements have direct implications for bullion products, including the Royal Canadian Mint’s Gold and Silver Maple Leafs.
A one-ounce Silver Maple Leaf contains one troy ounce of fine silver, making changes in the spot price an important component of its value. However, retail prices also reflect dealer premiums, manufacturing costs and market demand.
Common-date Canadian silver coins issued before 1968 are also affected by fluctuations in bullion prices. Their intrinsic value changes with the silver market, although collectible examples can command premiums based on condition, scarcity and collector interest.
Gold coins, including modern bullion issues and older Canadian gold pieces, are similarly influenced by changes in the underlying metal price. Coins with substantial numismatic premiums may be less sensitive to short-term movements in bullion.
For dealers, the recent volatility presents challenges in managing inventory, setting purchase prices and maintaining retail margins. Rapid price changes can also influence whether customers choose to buy, sell or hold their precious metals.
Despite gold’s partial recovery this week, the market remains unsettled. Investors are watching inflation figures, central bank decisions and currency movements for indications of where precious metals prices may head next.
For Canadian collectors and dealers, the past seven days have reinforced an important distinction: international bullion prices tell only part of the story. The Canadian dollar, dealer premiums and numismatic demand all play a role in determining what coins and precious metals are worth in the domestic market.