Gold vs Platinum: Which Precious Metal Investment Delivers Superior Returns?

When it comes to precious metal investments, two ETFs stand out for their impressive 2025 performance: the VanEck Gold Miners ETF (GDX) and the abrdn Physical Platinum Shares ETF (PPLT). Both delivered triple-digit returns, yet they represent fundamentally different approaches to accessing precious metals. Understanding their distinct structures, costs, and risk profiles is essential for investors looking to incorporate precious metal exposure into their portfolios.

Comparing the Top Two Precious Metal ETFs: GDX and PPLT

At first glance, GDX and PPLT appear to be competing products in the precious metal space, but they actually serve different investor needs. GDX tracks an index of global gold mining companies, providing indirect exposure to precious metals through equity investments. PPLT, by contrast, holds physical platinum bars, offering direct spot-price exposure to the metal itself. This fundamental difference shapes everything from their performance characteristics to their dividend policies.

The data tells an interesting story. As of late January 2026, PPLT slightly outpaced GDX with a 190.64% one-year return compared to GDX’s 185.16%. Yet GDX commands significantly larger assets under management at $30.36 billion versus PPLT’s $3.52 billion, reflecting GDX’s broader appeal to institutional and retail investors seeking precious metal investments.

Performance Metrics: How These Precious Metal Funds Performed

When examining downside risk over five years, the two precious metal ETFs diverge notably. GDX experienced a maximum drawdown of -46.52%, while PPLT’s fell to -35.73%—suggesting that physical precious metals offer somewhat smoother returns than mining equities. However, GDX’s $1,000 investment grew to $2,587 over five years, substantially outpacing PPLT’s $2,133 growth. This reflects mining companies’ leveraged exposure to precious metal price movements.

Volatility also differs markedly between these precious metal vehicles. GDX carries a beta of 0.64 relative to the S&P 500, while PPLT’s beta stands at 0.34. This means PPLT’s precious metal holdings move more independently from broad market swings, potentially offering better portfolio diversification for investors seeking uncorrelated assets.

Understanding the Structural Differences

GDX’s top precious metal mining holdings include Agnico Eagle Mines Ltd., Newmont Corp., and Barrick Mining Corp., which together represent a significant portion of the fund’s assets. Diversification is built into the strategy, as positions outside the top three holdings each comprise less than 5% of the fund.

PPLT takes a different route by holding physical precious metals directly. The fund’s 16-year track record makes it one of the longest-established options for direct platinum exposure. Over the past year, platinum prices—and thus PPLT’s valuation—have swung from $82.79 to $225.71, reflecting precious metals’ inherent volatility.

A notable difference emerges in income generation. GDX offers an annual dividend yield of 0.59%, reflecting the cash flows generated by mining operations. PPLT provides no dividend, as physical precious metals generate no cash flow—investors profit purely from price appreciation.

Why Precious Metals Matter as a Portfolio Asset

The strong performance of both vehicles in 2025 underscores why precious metals have attracted renewed investor interest. Traditionally, precious metal investments serve as hedges against currency devaluation and economic uncertainty. When the U.S. dollar weakens or geopolitical tensions rise, precious metals typically appreciate as investors seek safe-haven assets.

The scarcity argument adds another dimension to precious metal investing. Platinum is estimated to be at least 10 times rarer than gold, yet it remains less popular among retail precious metal investors. As these rare materials become increasingly difficult to extract and supply remains constrained, long-term value appreciation becomes plausible for precious metal holdings.

Cost considerations deserve attention. GDX’s expense ratio of 0.51% beats PPLT’s 0.60%, though the modest difference may be offset by PPLT’s higher recent returns and its direct exposure to precious metals without intermediaries.

Making Your Choice: Which Precious Metal ETF Fits Your Strategy?

For income-focused investors seeking precious metal exposure, GDX’s dividend yield provides consistent cash flow alongside price appreciation. The fund’s larger size ensures superior liquidity for those trading substantial positions. Meanwhile, PPLT appeals to investors prioritizing direct precious metal ownership and lower volatility, accepting the trade-off of zero dividend income.

Neither fund should be viewed as a source of exponential annual returns. The exceptional performance of precious metals in 2025 represented one of the best years on record. Unless geopolitical instability persists or global financial conditions deteriorate further, investors should temper expectations for 2026 and beyond.

The choice between these precious metal investments ultimately depends on your investment philosophy. Whether you prefer the operational leverage of mining companies or the direct tangibility of physical precious metals, both offer legitimate pathways into this essential asset class. The key is ensuring your choice aligns with your risk tolerance, time horizon, and portfolio objectives.