The Canadian dollar is in freefall. Among the world’s ten major currencies, it is the worst performer this year, losing ground against the U.S. dollar, euro, and even the struggling Japanese yen. Investors are pulling out, and confidence in Canada’s financial stability is eroding. This is not just a temporary slump. It is a glaring sign of deeper economic mismanagement.
While other nations brace for inflation and market volatility by stockpiling gold, Canada remains the only G10 country with zero official gold reserves. The government sold off its last gold holdings years ago, betting that fiat currency and foreign exchange reserves would be enough to maintain stability. That gamble is now looking reckless as global markets shift toward hard assets.
The numbers tell the story. The Canadian dollar has dropped nearly 8 percent against the U.S. dollar since January, making it the worst-performing major currency in 2025. Meanwhile, gold prices have surged past $2,400 per ounce, with central banks worldwide increasing their holdings. China, Russia, and even smaller economies like Poland and Turkey have aggressively expanded their gold reserves. Canada, however, has nothing. Not a single ounce in official reserves.
Ottawa’s decision to abandon gold has left the country vulnerable. When currencies weaken, nations with gold reserves can stabilize their economies by leveraging their holdings. Canada has no such safety net. If the dollar continues to slide, the government will have few options beyond interest rate hikes or foreign borrowing. Neither of those choices will restore confidence in the currency.
The consequences are already visible. Foreign investors are pulling out of Canadian assets, wary of the currency’s instability. Bond yields are rising as markets demand higher returns to compensate for the risk. The Bank of Canada has hinted at possible intervention, but without gold reserves, its ability to defend the currency is limited. This is what happens when a nation ignores history and bets everything on paper money.
The global trend is clear. Gold is making a comeback as a preferred reserve asset, and countries that hold it are in a stronger position to weather financial storms. Canada, by contrast, is standing alone, watching its currency sink with no gold to back it up. The question is not whether this policy will backfire. It already has. The only question left is how much worse it will get.
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