The price of physical gold is soaring due to global instability, but gold mining stocks are outperforming the precious metal. In 2025, gold mining ETFs have returned 85-102% compared to 29% for physical gold ETCs. Gold miners are a leveraged bet on gold prices, with stock prices moving more than gold prices due to operational leverage.

Investors must consider their portfolio goals when choosing between physical gold and mining stocks. While physical gold closely tracks gold prices, mining stocks offer income through buybacks and dividends. The price of gold has surged 125% since 2022, hitting an all-time high of $3,660 per ounce. US interest rate cuts have boosted gold prices, making gold mining stocks an attractive investment.

Gold mining companies have underperformed compared to physical gold, but gold miner stocks have rallied. The iShares Gold Producers ETF delivered a return of 4.42% in 2023 and 13.47% in 2024, while the iShares Physical Gold ETC returned 7.25% and 28.7%. Gold mining stocks offer a unique opportunity for investors seeking diversification and income.

Read more at Morningstar: Should I Invest in Mining Stocks or Buy Physical Gold?