Precious metals now represent Ontario’s largest export to the country
China’s demand for gold has risen in the past few years, helping to usher in record-breaking prices and a growing trade relationship with Canada for the shiny metal.
In the past, interest rates in the United States and flows into or out of gold-backed exchange-traded funds (ETFs) were used by many analysts as a quick way to predict the direction of the gold price. In recent years, though, U.S. interest rates rose and gold-backed ETF holdings contracted, which should have softened gold prices, but the price of bullion reached all-time highs, currently at US$2,371 per ounce.
“Gold’s bellwether relationship with U.S. real interest rates has broken down quite spectacularly over the past two years, with gold reaching all-time highs despite high real rates,” Max Layton, global head of commodities research at Citigroup Inc., said in a new note on gold prices.
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