Gold’s momentum shows little sign of slowing, with renewed central bank buying, retail demand and lower real rates supporting the rally through 2026.
BNN Bloomberg spoke with Sébastien McMahon, chief strategist and portfolio manager at iA Global Asset Management, about gold’s role in portfolios, the outlook for Canadian stocks and the policy shifts shaping investor sentiment.
Key Takeaways
- Gold is expected to rise further as central banks buy reserves, retail investors increase holdings and real rates fall.
- Bitcoin remains too correlated with tech and is not viewed as a separate asset class.
- The bull market continues, with global ex-U.S. equities preferred and Canadian stocks set to gain.
- Canada’s Nov. 4 budget could boost infrastructure and defence spending, spurring growth.
- U.S. tariff shifts and deeper North American supply-chain ties could favour Canadian industries.
Read the full transcript below:
MERELLA: Gold and crypto are still climbing, even as the S&P 500, Nasdaq and TSX all ended higher. My next guest says this is a bull market but favours global equities and sees upside for Canadian stocks into next year. Here with investment ideas is Sébastien McMahon, chief strategist and portfolio manager at iA Global Asset Management. Thanks for joining us today.
SÉBASTIEN: My pleasure.
MERELLA: So what’s driving gold when we’re seeing equities rise as well?
SÉBASTIEN: There are several factors. The best trades in this business are those with multiple supports. We still have the de-dollarization theme among central banks, which continues. The retail sector is also getting more involved in gold, as seen in rising ETF holdings. Lower interest rates — and especially lower real rates — are another driver. If you believe the U.S. Federal Reserve will cut as quickly as markets are pricing in, that’s supportive for gold. Markets also like round numbers, and with gold hitting US$4,000, we could see some consolidation. But looking to 2026, we still believe gold has an important role to play in portfolios.
MERELLA: What’s your outlook for gold from here?
SÉBASTIEN: We think gold will continue to rise. I don’t know if we’ll hit US$4,500 soon, but the next milestones are likely US$4,500 and US$5,000. The key will be whether global central banks keep adding to their gold reserves. So far, that trend remains strong. They’re shedding U.S. dollars, but they’re not adding the yuan or the euro — they’re buying gold. As long as we see the retail sector joining in, the trade remains attractive. It’s one to stay with and let run.
MERELLA: What about crypto? Bitcoin climbed past US$125,000 over the weekend. Is that connected to U.S. dollar weakness?
SÉBASTIEN: Maybe, but we’re still not big fans of crypto or Bitcoin as an asset class, at least in our process. Bitcoin remains too correlated with equities, particularly the Nasdaq. It’s not one-to-one, but it’s close enough. We don’t see crypto replacing gold, so we prefer to keep things simple. While Bitcoin’s moves have some knock-on effects for stock selection, we still prefer gold as the alternative to the U.S. dollar.
MERELLA: Canada’s prime minister is set to meet the U.S. president tomorrow. Do you expect any reaction or catalyst for Canadian stocks from that meeting?
SÉBASTIEN: It’s always hard to predict anything with Donald Trump, but the good news is that this meeting was reportedly initiated by him. That’s encouraging. We’ve heard that pressure from the auto sector may have prompted him to rethink auto tariffs, and perhaps he’ll pivot on steel tariffs too. About 23 per cent of U.S. steel imports come from Canada — double what Mexico sends. That could be good news for us. The North American supply chain is deeply integrated, and the U.S. simply can’t ramp up domestic steel production fast enough to meet demand. So we’ll see what comes out of tomorrow’s meeting, but there’s room for optimism.
MERELLA: You see more upside for Canadian equities into next year. How much of that depends on what we hear in the federal budget in November?
SÉBASTIEN: We’re laser-focused on that. It could be a historic budget, maybe comparable to Paul Martin’s 1995 budget. We expect major infrastructure and defence spending. Based on FactSet data, markets are pricing about 20 per cent earnings growth for Canadian companies over the next 12 months — an ambitious target, but it reflects potential. The federal government will likely do all it can to kickstart investment, but the private sector also needs to step up. Confidence levels aren’t high, but that means there’s room to improve. If the government delivers on infrastructure and LNG commitments, construction activity should strengthen Canada’s economy and the TSX.
MERELLA: You mentioned some stocks you’re watching in that space — Bird Construction and Tourmaline.
SÉBASTIEN: Exactly. On LNG export capacity expansion, we like Tourmaline — the leading Canadian producer, based in Calgary. It’s a dividend play, with low leverage and trading around 10 times forward earnings, near one-year lows. It’s a no-brainer. On the engineering and construction side, Bird Construction is a standout. They’re based in Mississauga and lead in port and defence infrastructure. They recently acquired Fraser River Pile and Dredge, which strengthens their expertise in marine construction, and they have a record-high backlog. These names aren’t yet pricing in the potential upside from the budget, and we’re focused on them.
MERELLA: We’ll leave it there. Sébastien McMahon, chief strategist and portfolio manager at iA Global Asset Management, thank you for your time.
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This BNN Bloomberg summary and transcript of the Oct. 6, 2025 interview with Sébastien McMahon are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
