GLD Versus GDX: Choosing Between Physical Gold and Mining Stocks

Owning GLD mirrors gold through physical bullion held in vaults whereas GDX gives exposure to mining companies that can amplify returns and add company risk.

Overview

GLD is a bullion-backed trust that holds physical gold in secure vaults and charges a 0.40% expense ratio that covers custody and insurance costs.
GDX is an ETF of about 69 gold-mining companies that tracks the MarketVector Global Gold Miners Index and charges a 0.51% fee to manage equity holdings.
The two funds translate the recent strong gold rally differently because GLD tracks the metal itself while GDX reflects miners' profits, production costs, exploration results and management choices.
Investors choosing between them face a trade-off: GLD offers simpler, lower-cost commodity tracking and lower company risk, while GDX offers operational leverage, dividends and higher upside with greater equity volatility.
Both funds have long track records—GLD launched in 2004 and GDX in 2006—and the choice affects portfolio behavior, tax treatment, income potential and sensitivity to stock-market moves.