Investment Dilemma: GLD vs GDX - Which ETF to Choose in 2025?

Context: Gold at Historic Records

Gold has just surpassed $3,050 and has set new records four times in five days. Since the beginning of the year, two ETFs dominate the market: GLD (SPDR Gold Trust) has increased by +15.6%, while GDX (VanEck Gold Miners) has exploded with +32.3%. The question is: why such a gap?

Why is gold currently soaring?

Three factors explain this spectacular rise:

1. Trade tensions: New tariffs are driving up inflation and threatening economic growth. Gold becomes the ideal hedge.

2. Geopolitics: Russia-Ukraine ceasefire talks are stagnating, Israel is intensifying airstrikes. Result: massive demand for safe-haven assets.

3. Interest rates: The Fed hints at possible rate cuts before the end of 2025. This is excellent for gold (less attractive when rates rise).

Bonus: central banks are accumulating gold en masse (more than 1,000 tons for the third consecutive year), and the dollar is weakening (dollar index at its lowest in five months).

GLD vs GDX: what you need to know

GLD = Pure play on gold price

• AUM: $87.4 billion
• Annual fees: 0.40%
• Storage: physical gold bars in London vaults
• Advantage: Stability, zero company risk
• Disadvantage: No yield, profit only if gold rises

GDX = Basket of 63 gold mining companies

• AUM: $14.8 billion
• Annual fees: 0.51%
• Composition: 44.6% Canada, 16.5% USA, 11.1% Australia
• Advantage: Leverage (a small increase in gold = big profit for miners)
• Disadvantage: Company-specific risks, higher volatility

Explaining the big gap

GDX outperforms GLD by 16.7 percentage points this year. That makes sense: when gold rises, miners gain faster thanks to their operational leverage. Simplified example: if gold price increases by 5%, miner profits can double or triple. Conversely, during a decline, GDX also falls more sharply.

Which ETF suits which profile?

• GLD for conservatives: Looking for real protection against inflation and geopolitical uncertainty? GLD offers direct and straightforward exposure.

• GDX for aggressive investors: Believe gold still has potential and accept the rollercoaster? GDX can double your gains (or losses).

The final result

This year, gold miners outperform the simple gold bar. But beware: GDX sometimes pays dividends and relies on growth prospects beyond just the gold price. The risks? Management decisions, mining accidents, regulatory changes. GLD, on the other hand, sleeps peacefully: it’s just stored yellow metal in secure vaults.