Key Takeaways
- • Gold surged roughly 63 per cent in 2025, rising from about USD$2,000 to more than $5,000 per ounce, making precious metals the largest positive contributor to broad commodity indices that year, according to Benefits Canada.
- • Ontario Teachers' Pension Plan reported that commodities made up 10 per cent of its portfolio, or $30.1 billion, as of June 30, within inflation-sensitive assets representing about 18 per cent of net investments.
- • Eckler Ltd.'s Devin Forbes says pension plans generally avoid large direct commodity allocations because timing cycles is difficult, and instead access commodities indirectly through Canadian equities, alternatives such as private equity or private debt tied to mine financing, or commodity ETFs.
- • Central bank gold buying, which accelerated from 2022 after Western sanctions froze Russian assets, is cited by Northern Trust's Grant Johnsey as a key driver, with gold now treated as a tier one reserve asset by the Bank for International Settlements.
- • Experts warn that commodity volatility is a double-edged sword, and that refined products such as gasoline and diesel, along with crack spreads, may matter more than crude oil amid Middle East disruptions.
Summary
Gold and other commodities have become a more established part of institutional portfolios, including pension funds, as the asset class gains wider acceptance. In 2025, precious metals provided the largest positive contribution to broad commodity indices, with gold rising roughly 63 per cent. Many pension plan sponsors used that rally to support portfolio returns and offset broader market volatility, according to the source article.
Ontario Teachers' Pension Plan attributed the predominance of its total fund return in the first half of 2025 to its public assets, particularly gold. Steve Saldanha, executive managing director of total fund management, said commodities help manage inflation risk and contribute to portfolio balance. As of June 30, inflation-sensitive assets were about 18 per cent of the plan's net investments, with commodities at 10 per cent, or $30.1 billion.
Devin Forbes, associate director of investment consulting at Eckler Ltd., said pension plans would not typically hold large direct commodity allocations because timing commodity cycles is difficult. He said plan sponsors can gain exposure indirectly through Canadian commodity companies, alternatives such as hedge funds, private equity or private debt tied to mine financing, or directly through commodity exchange-traded funds. Eckler has taken commodity exposure through its Canadian equity managers.
Grant Johnsey, head of market solutions for the Americas at Northern Trust, said central bank demand has been a key driver of gold's rise since 2022, when Western sanctions froze Russian assets. He noted that central banks have shifted away from U.S. Treasuries as reserve assets and that gold has been designated a tier one reserve asset by the Bank for International Settlements. Rick de los Reyes, head of commodities at T. Rowe Price, said gold behaves more like a store of value than an industrial commodity, with rates, money supply and currency debasement as key influences.
Ryan Crowther, portfolio manager at Franklin Templeton's ClearBridge Investments, said gold's durability has strengthened its status as a go-to asset class, and that cryptocurrencies did not displace it as an uncorrelated asset. He cautioned that gold's volatility cuts both ways and that the business durability of commodity producers is critical. Discussing geopolitical risk, de los Reyes said investors should focus on refined products and crack spreads rather than crude oil alone, given refinery damage in the Middle East and Russia.
Ontario Teachers' Pension Plan attributed the predominance of its total fund return in the first half of 2025 to its public assets, particularly gold. Steve Saldanha, executive managing director of total fund management, said commodities help manage inflation risk and contribute to portfolio balance. As of June 30, inflation-sensitive assets were about 18 per cent of the plan's net investments, with commodities at 10 per cent, or $30.1 billion.
Devin Forbes, associate director of investment consulting at Eckler Ltd., said pension plans would not typically hold large direct commodity allocations because timing commodity cycles is difficult. He said plan sponsors can gain exposure indirectly through Canadian commodity companies, alternatives such as hedge funds, private equity or private debt tied to mine financing, or directly through commodity exchange-traded funds. Eckler has taken commodity exposure through its Canadian equity managers.
Grant Johnsey, head of market solutions for the Americas at Northern Trust, said central bank demand has been a key driver of gold's rise since 2022, when Western sanctions froze Russian assets. He noted that central banks have shifted away from U.S. Treasuries as reserve assets and that gold has been designated a tier one reserve asset by the Bank for International Settlements. Rick de los Reyes, head of commodities at T. Rowe Price, said gold behaves more like a store of value than an industrial commodity, with rates, money supply and currency debasement as key influences.
Ryan Crowther, portfolio manager at Franklin Templeton's ClearBridge Investments, said gold's durability has strengthened its status as a go-to asset class, and that cryptocurrencies did not displace it as an uncorrelated asset. He cautioned that gold's volatility cuts both ways and that the business durability of commodity producers is critical. Discussing geopolitical risk, de los Reyes said investors should focus on refined products and crack spreads rather than crude oil alone, given refinery damage in the Middle East and Russia.
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