Gold ETFs vs Physical Gold vs Mining Stocks

Bars and coins, bullion funds and mining shares all track gold differently. Here is what you own in each, what it costs, and where the risks sit.

There are three common ways to get exposure to gold: own the metal, own units of a fund that holds the metal, or own shares of companies that mine it. They behave differently. Physical gold and bullion funds track the gold price minus costs. Mining shares track company profits, which move more than the gold price and carry company-specific risk.

Physical gold: bars and coins

With physical gold, you own the metal outright. The Royal Canadian Mint's one-ounce Gold Maple Leaf is a common example: 99.99% pure, 31.11 grams, a $50 face value, and more than 25 million ounces sold since its introduction in 1979, according to the Mint.

What it costs and what to know:

Premium on purchase: dealers sell above the spot price to cover fabrication and distribution.
Spread on sale: dealers buy back below their selling price.
Storage and insurance: a safe deposit box or vaulting service is an ongoing cost.
No income: gold pays no interest or dividend.
No issuer: metal held directly does not depend on any company or bank staying solvent.

Bullion ETFs and trusts

A bullion fund holds gold bars in a vault and issues units against them. The unit price tracks the value of the gold held, less fees.

SPDR Gold Shares (GLD), launched November 18, 2004, is the best-known example. Its sponsor lists an expense ratio of 0.40%, custodians JPMorgan Chase Bank and HSBC Bank, and a net asset value based on the LBMA Gold Price PM. The fund pays its expenses by selling gold, so the amount of gold behind each share slowly declines over time.

A different structure is the closed-end trust. The Sprott Physical Gold Trust, launched February 25, 2010, holds London Good Delivery bars at the Royal Canadian Mint and lets unitholders redeem for physical metal monthly, subject to a minimum. It trades on the TSX and NYSE Arca and reported a management expense ratio of 0.39% (annualized, as of June 30, 2026). A closed-end fund's units can trade at a premium or discount to the value of the gold it holds.

One structural detail differs between products: whether the bars are allocated or unallocated. The LBMA describes an unallocated account as a claim on the bank holding the metal, similar to a deposit, and an allocated account as specific numbered bars held in custody, like a safe deposit box. Allocated metal removes the bank's credit risk from the picture. GLD and the Sprott trust both describe their bars as allocated or segregated.

These funds are large. The World Gold Council reports that global gold ETFs held a record 4,189 tonnes worth US$615 billion as of August 31, 2026, after US$18 billion of inflows in August alone.

Gold mining stocks

A mining share is ownership in a business. Its value depends on how much gold the company produces, what each ounce costs, how much it reinvests, and how it is valued by the market. The gold price is one input.

Costs are the other big input. The World Gold Council reports the industry's average all-in sustaining cost (AISC) at US$1,785 an ounce in Q1 2026, up 16% from a year earlier, leaving an average margin of US$3,076 an ounce. Because costs do not move one-for-one with the gold price, miner profits swing more than gold does, in both directions. We explain the cost metric in all-in sustaining costs explained.

Mining shares also carry risks bullion does not: operational problems, cost inflation, changes to royalties and taxes, and permitting. Some pay dividends.

Many investors hold miners through a fund. The VanEck Gold Miners ETF (GDX), launched May 16, 2006, holds 65 companies and lists a net expense ratio of 0.51%. As of September 23, 2026 its top five holdings were Newmont (11.11%), Agnico Eagle (10.98%), Barrick (7.75%), Wheaton Precious Metals (5.64%) and Franco-Nevada (5.22%). Two of those five are royalty and streaming companies, which earn money differently from operators, as covered in how royalty and streaming companies make money.

Side by side

	Physical gold	Bullion ETF or trust	Mining stocks
What you own	The metal	Units of a fund holding metal	Shares of a company
Main costs	Premium, spread, storage	Annual expense ratio, trading commissions	Trading commissions; fund fee if held through an ETF
Link to gold price	Direct	Direct, less fees	Indirect, through margins
Who you rely on	Your own storage	Fund sponsor and custodian	Company management and operations
Income	None	None	Possible dividends

The math

Fees compound. On a $10,000 holding:

At a 0.40% expense ratio, the annual cost is $40. Over 10 years with a flat gold price, the gold behind each unit shrinks to 0.996 to the power of 10, about 96.1% of the start, so roughly 3.9% less gold.
At 0.51%, the annual cost is $51.

Miner margins move differently. Using the World Gold Council's Q1 2026 industry averages, AISC of US$1,785 plus a margin of US$3,076 implies an average gold price of about US$4,861. Holding costs flat as an illustration, a 10% change in that price (about US$486) would change the average margin by about 15.8% (486 divided by 3,076). That is operating leverage: a bigger percentage move in margin than in gold, in either direction.

Physical gold's cost is up front. In a clearly hypothetical case, a buyer pays 4% over spot and later sells at 1% under spot. The gold price has to rise about 5% (1.04 divided by 0.99, minus 1) just to break even. Actual premiums vary by product, size and dealer.

What to watch

World Gold Council monthly ETF flow reports, for holdings and inflows by region.
Fund disclosures: daily gold holdings and published expense ratios.
Quarterly miner results, for production, AISC and realized gold price.
World Gold Council quarterly AISC data, for the industry cost trend.

Sources

Frequently asked questions

What is the difference between a gold ETF and physical gold?

With physical gold you own the metal and pay a dealer premium, a spread on sale, and storage costs. A gold ETF holds bars in a vault and issues units against them, charging an annual fee instead. SPDR Gold Shares charges 0.40% and sells gold to pay expenses, so the gold behind each share slowly declines.

Do gold mining stocks follow the gold price?

Only indirectly. A miner's profit is the gold price minus its costs, so profits move more than gold in both directions. The World Gold Council put average all-in sustaining costs at US$1,785 an ounce in Q1 2026. Miners also carry operational, cost, royalty and permitting risks that bullion does not.

What is the Sprott Physical Gold Trust?

It is a closed-end trust launched February 25, 2010 that holds London Good Delivery gold bars at the Royal Canadian Mint. Unitholders can redeem for physical gold monthly, subject to a minimum. It trades on the TSX and NYSE Arca and reported a 0.39% management expense ratio, annualized as of June 30, 2026.

Gold ETFs vs Physical Gold vs Gold Mining Stocks: How Each One Works