Gold and Silver ETFs Drop as Inflation Fears Reshape Canadian Flows
Canadian gold and silver ETFs declined sharply last week as rising oil prices and shifting rate expectations weakened demand for traditional safe havens.
Safe Havens Falter Despite Rising Geopolitical Risk
Precious metals entered the week of March 23 under significant pressure, marking a notable shift in market behavior as gold and silver declined even while geopolitical tensions intensified.
The ongoing Iran war has pushed oil prices above $100 per barrel, fueling renewed inflation concerns across global markets. Normally, such instability would drive investors toward traditional safe havens. Instead, gold and silver have moved sharply lower, reflecting a macro environment dominated less by fear and more by interest-rate expectations.
Silver prices extended a multi-week selloff, falling toward $64 per ounce after dropping more than 15% last week alone. Gold followed a similar path, declining roughly 10% over the same period and recording one of its worst weekly performances in over a decade.
The shift highlights how markets are interpreting the conflict primarily as an inflation shock rather than a financial stability crisis. Higher energy costs are raising expectations that central banks may need to keep monetary policy restrictive for longer, limiting the appeal of non-yielding assets.
Rising Yields Change the Investment Equation
As inflation expectations rise, investors are increasingly pricing in the possibility that the Federal Reserve and other major central banks could delay rate cuts — or even tighten policy further later this year.
This dynamic is critical for precious metals. Gold and silver do not generate income, meaning their relative attractiveness declines when bond yields rise and cash alternatives become more competitive.
Additional pressure has emerged from reports that several Gulf economies may be selling gold reserves to raise liquidity amid war-related economic stress. Combined with profit-taking after a strong rally earlier in the year — when gold traded above $5,500 per ounce — the result has been a rapid repricing across the precious metals complex.
For Canadian investors, the adjustment has translated into heightened volatility across bullion-backed ETFs and mining-equity exposures alike.
Canadian Gold and Silver ETFs Reflect Broad Repositioning
Canadian-listed precious metals ETFs mirrored the global selloff, though flows suggest investors are selectively maintaining strategic allocations.
Gold ETFs in Canada, managing approximately $7.0 billion in assets, declined 9.85% over the past week but still attracted $610 million in net inflows, indicating that some investors viewed the correction as a buying opportunity rather than a structural exit.
The iShares S&P/TSX Global Gold Index ETF (XGD), which provides exposure to gold mining equities, fell 14.22% during the week as equity sensitivity amplified the decline in bullion prices. Year-to-date flows remain negative, reflecting ongoing caution toward mining stocks.
Bullion-focused products proved comparatively resilient. The iShares Gold Bullion ETF (CGL) declined 9.63% while maintaining positive year-to-date flows, and the BMO Gold Bullion ETF (ZGLD) posted a similar weekly drop of 9.65%, continuing to attract steady investor allocations in 2026.
Silver ETFs experienced sharper volatility. The segment, managing $1.08 billion in assets, fell 14.23% week-over-week but recorded $139 million in inflows, suggesting opportunistic positioning amid falling prices.
The iShares Silver Bullion ETF (SVR) declined 13.65% yet continued to gather assets this year, while physically backed products such as Purpose Silver Bullion Trust (SBT.B) saw deeper losses alongside modest outflows.
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Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
