Is Wealthsimple’s New Physical Gold Trading Worth It?

What is Wealthsimple’s Physical Gold Trading?

Wealthsimple’s Physical Gold Trading feature allows eligible clients to buy and sell direct exposure to physical gold through the Wealthsimple app. Instead of owning units of a gold ETF, you are effectively buying an interest in specific gold bars that are stored in a professional vault on your behalf.

The key idea is that Wealthsimple partners with a third-party bullion provider and custodian. When you place an order, Wealthsimple executes a trade, the provider sources or allocates gold, and the metal is held in secure storage. In return, your Wealthsimple account shows your gold holdings in ounces or fractions of an ounce, similar to how it displays stocks or ETFs.

At launch, the feature is focused on simple buy-and-sell functionality—you are not taking delivery of coins or bars to your home. Instead, you own claims on metal in storage, and you realize gains or losses when you sell your position back through the app.

How does it work in practice?

While exact details can evolve, the basic workflow for Wealthsimple’s Physical Gold Trading generally looks like this:

• You open or use an existing Wealthsimple account (for example, a non-registered, TFSA or RRSP account, if eligible).
• Within the app, you navigate to the Physical Gold Trading section and choose how much you want to invest, either by dollar amount or by weight (such as 0.25 oz or 1 oz).
• Wealthsimple shows you a live quote that includes the market price for gold plus any applicable spread or markup.
• If you confirm, the trade is executed and your account is updated with your new gold holdings.
• When you sell, you receive the proceeds in cash (minus fees and spreads) back into your Wealthsimple account.

Behind the scenes, Wealthsimple and its partners manage storage, insurance and auditing of the underlying gold bars. Clients do not need to worry about arranging vault storage or insuring bullion at home, but they also do not physically see or touch the metal they own.

Fees, spreads and storage costs

Whether Physical Gold Trading is “worth it” depends heavily on total costs. In addition to Wealthsimple’s standard account fees (if any), you should pay attention to:

• Bid-ask spread: The difference between the price at which you can buy and the price at which you can sell. Wider spreads mean you need a larger price move in gold just to break even.
• Markup over spot: Physical gold products typically trade at a premium to the global spot price to reflect fabrication, logistics and dealer margins. Wealthsimple’s pricing will incorporate some of these costs.
• Ongoing storage and insurance: Some platforms charge an annual percentage fee on the value of your holdings to cover vault storage and insurance. It’s important to confirm how and when these fees are assessed.
• Foreign exchange: If trades are executed in U.S. dollars rather than Canadian dollars, currency conversion costs can add another layer of friction.

Before using the feature, read Wealthsimple’s fee schedule and product disclosures carefully. Then compare those costs with low-cost gold ETFs listed on Canadian exchanges, many of which charge relatively modest management expense ratios (MERs) and trade with tight bid-ask spreads.

Pros of using Wealthsimple for physical gold

Some potential advantages of Wealthsimple’s Physical Gold Trading for Canadian investors include:

• Convenience: You can buy and sell gold in the same app where you manage your other investments, without opening a separate bullion account.
• Professional storage: The gold is held in secure, insured vaults, which reduces the risks of storing bullion at home (such as theft or loss).
• Fractional ownership: Unlike buying whole bars or coins, you can invest smaller amounts, making gold more accessible to investors who don’t want to commit thousands of dollars at once.
• Registered account eligibility: If the structure allows it, holding gold exposure in a TFSA or RRSP can offer tax advantages compared with holding bullion personally in a safety-deposit box.
• No shipping or handling logistics: You don’t need to arrange delivery, storage, or insurance yourself.

Drawbacks and risks to consider

On the other hand, there are meaningful trade-offs to be aware of:

• You don’t hold the metal yourself: If your primary reason for owning gold is to have physical coins or bars on hand in an emergency, custodial gold in a vault may not meet that objective.
• Costs can be higher than ETFs: Once you factor in spreads, premiums and storage, total costs may exceed those of a simple gold ETF, especially for smaller positions or frequent trading.
• Platform and counterparty risk: As with any custodial solution, you are relying on Wealthsimple and its partners to manage storage, insurance and record-keeping properly.
• Gold is still volatile: Even physical gold can experience significant price swings. It is not a guaranteed “safe” investment and can underperform stocks and bonds for long periods.
• Tax complexity: In non-registered accounts, realized gains on gold are generally taxable as capital gains. Keep records of your adjusted cost base and consult a tax professional if needed.

Physical gold vs. gold ETFs vs. mining stocks

When deciding whether to use Wealthsimple’s Physical Gold Trading, it helps to compare it with other common ways Canadians invest in gold:

• Physical gold via Wealthsimple: Direct exposure to vaulted bullion, potentially higher costs than ETFs, no personal storage hassles, and no home delivery.
• Gold ETFs: Offer diversified, easily tradable exposure with relatively low MERs. You don’t directly hold specific bars, but for many long-term investors the cost and liquidity advantages outweigh that concern.
• Gold mining stocks: Provide leveraged exposure to gold prices, but come with company-specific risks (management, costs, reserves, politics). They can behave more like equities than pure gold.
• Physical coins and bars you store yourself: Maximum control and tangibility, but you are responsible for securing, insuring and managing the metal.

There is no universally “best” option—each approach serves different goals. The right choice depends on whether you prioritize cost, convenience, tangibility, tax efficiency or simplicity.

Who might Wealthsimple’s Physical Gold Trading be right for?

This type of product may be worth exploring if you:

• Already use Wealthsimple and prefer to keep your investments in one place.
• Want direct bullion exposure without managing physical storage.
• Plan to hold gold as a small diversification slice (for example, 5% to 10% of your portfolio), not as a speculative trade.
• Are comfortable paying a bit more for convenience and custody compared with the very lowest-cost ETF options.

On the other hand, you may want to stick with gold ETFs or avoid gold entirely for now if you:

• Are very fee-sensitive and want the lowest possible cost exposure.
• Prefer the liquidity and narrow spreads of major ETFs.
• Do not fully understand how custodial gold is stored, insured and audited.
• Already have significant exposure to gold or other commodities in your portfolio.

So, is Wealthsimple’s Physical Gold Trading worth it?

For Canadian investors who want a straightforward way to own vaulted gold without opening a dedicated bullion account, Wealthsimple’s Physical Gold Trading could be a convenient solution. The feature integrates neatly into an existing app that many people already use for ETFs, stocks and crypto, and it removes much of the friction involved in buying and storing physical metal.

However, “worth it” will ultimately come down to costs and your goals. If you simply want a low-cost hedge against market volatility, a broadly available gold ETF may achieve that objective more cheaply. If you are attracted to the idea of owning specific bars and are comfortable with slightly higher costs for convenience, the new feature may fit your needs.

As with any investment decision, take time to read Wealthsimple’s product disclosures, compare fee structures with alternatives, and consider how much of your portfolio you really want in gold. A modest allocation can add diversification, but concentrated bets in any single asset—even one as old as gold—can increase risk.

If you are unsure, speaking with a qualified financial advisor can help you decide whether Physical Gold Trading belongs in your personal financial plan.