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(Kitco News) Canadian gold exports jumped in April, pushing the nation's export volumes to record highs, according to Statistics Canada.
Canada's exports were up 2.5% in April, hitting an all-time high by volume and surpassing pre-COVID-19 pandemic levels. At the same time, imports fell 0.2% due to a fall in energy products, leading to a trade surplus of C$1.94 billion ($1.45 billion) in April.
The jump in exports was largely driven by metal and non-metallic mineral products, up 13.6% in April, Statistics Canada said.
"Exports of unwrought gold (+46.0%) posted the largest increase, on both higher volumes and prices," Statistics Canada said in the press release.
The soaring metal product exports included rising gold shipments from Canadian financial institutions to the United States. Statistics Canada said that increased interest in Canadian gold products indicates economic uncertainty.
"The gain largely reflected higher transfers of gold assets from Canadian financial institutions to the United States," the press release added. "These increases came amid a context of economic uncertainty when investors tend to favor safe-haven metals such as gold and silver."
These elevated levels are not expected to last into May or June, Reuters quoted Stuart Bergman, chief economist at Export Development Canada, as saying.
"The cautionary note is many of those volume shipments reflect those truckloads of gold being shipped down to the U.S., and so certainly that's not something that we would expect to see repeated in future months," Bergman said. "At face value, the headline number is fairly good, but as you dig a little bit deeper, there is cause for some concern as to whether we would expect to see these export gains repeated in May and June."
The widening trade surplus is another sign that Canada's economy is staying strong despite the Bank of Canada's rate-tightening cycle that began in March 2022.
This week, Canada's central bank raised its key interest rate by another 25 basis points to 4.75%, the highest since 2001. The move was a surprise as markets projected for rates to remain on hold after the central bank paused at the two prior consecutive meetings.
Justifying its decision to tighten monetary policy further in June, the central bank cited stubbornly high inflation, stronger-than-expected economic growth, and a tight labor market.
"Governing Council decided to increase the policy interest rate, reflecting our view that monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2% target," Canada's central bank said in a statement Wednesday. "Governing Council will continue to assess the dynamics of core inflation and the outlook for CPI inflation."
