The Gold Rush Continues: GDX's Amplified Bet vs. GLD's Steady Hold

SPDR Gold Shares (NYSEMKT:GLD) and VanEck Gold Miners ETF (NYSEMKT:GDX) both offer exposure to gold, but GLD tracks physical bullion prices while GDX invests in gold mining stocks, resulting in different risk profiles, returns, and cost structures.

Both GLD and GDX may appeal to investors seeking gold exposure, yet their approaches differ significantly: GLD reflects the price of gold itself, while GDX tracks an index of global gold mining companies. This comparison highlights the trade-offs between direct commodity exposure and equity-linked gold strategies.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

GLD is more affordable on an ongoing basis, with a 0.40% annual expense ratio compared to GDX’s 0.51%, though GDX’s higher fee may be offset for some by its potential for outsized returns, as seen over the past year.

Performance & risk comparison

What's inside

GDX holds 55 global gold mining stocks, offering indirect exposure to gold through company shares. Its top holdings include Agnico Eagle Mines (NYSE:AEM), Newmont (NYSE:NEM), and Barrick Mining (NYSE:B), which together make up a significant portion of the portfolio. The fund is nearly 20 years old and is fully concentrated in the basic materials sector, specifically gold mining. There are no notable structural quirks or leverage, making GDX straightforward for those seeking gold-linked equity exposure.

By contrast, GLD is a pure play on physical gold prices, with 100% of its portfolio in gold bullion and no company stocks. It does not list individual holdings because it represents allocated gold held in trust, not shares of mining companies. This makes GLD more directly tied to gold price movements, without the added operational or equity market risks inherent in mining stocks.

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What this means for investors

GDX and GLD both rode 2025's historic gold rally, but their approaches couldn't be more different. GLD holds physical gold bullion stored in vaults, while GDX invests in the companies that mine it. For investors, this choice between owning the metal directly or owning the businesses that extract it fundamentally shapes both potential returns and risk exposure.

While GLD moves in lockstep with gold's spot price, delivering straightforward exposure, GDX actually amplifies gold's moves. That’s because when prices rise, miners' profits surge because production costs stay relatively fixed while they sell gold at higher prices. That's why GDX returned 189% in the last year versus GLD's 77%. But GDX has also suffered a more painful maximum drawdown during past downturns, far exceeding GLD's worst decline.

Choose GLD for pure, stable gold exposure with minimal drama. Its $148 billion in assets and 0.40% expense ratio offer reliable protection for your portfolio. Opt for GDX if you're willing to accept mining company risks, such as operational challenges and management decisions, for amplified returns when gold rallies. For most investors seeking gold's defensive properties, GLD's reliability wins. But for those who believe gold could continue surging higher in 2026, GDX offers leveraged exposure.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.