Metals ETFs: Going Out of Style? – SPDR Gold Trust (ETF) (GLD), iShares Silver Trust (ETF) (SLV), Market Vectors Gold Miners ETF (NYSEARCA:GDX)

The better way to buy gold?
The figures above suggest that selling in metals ETFs is limited to gold. But even within the yellow metal’s niche, there’s conflicting evidence about whether gold ETFs or gold mining stocks are the better buy.

So far this year, mining stocks have continued their long streak of underperformance, with the Market Vectors Gold Miners ETF (NYSEARCA:GDX) down more than 20% year-to-date. High costs of mining operations have squeezed margins recently, putting more pressure on miners than even falling gold prices would warrant.

Yet yesterday, gold mining stocks rebounded sharply even as the metal itself continued its lackluster performance. With the miners ETF rising more than 4% compared to just a half-percentage-point move for SPDR Gold Trust (ETF) (NYSEARCA:GLD), investors appear to believe that mining stocks represent better value at current levels.

A premature conclusion
In general, metals ETFs don’t look like they’re going out of style, but rather are seeing normal flows among different types of funds. Short-term fluctuations in assets will happen, but as long as the Federal Reserve’s low interest rates make holding precious metals relatively cheap, metals ETFs will likely remain popular investments.

The article Metals ETFs: Going Out of Style? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

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