Investors seeking exposure to precious metals in 2026 face two distinct approaches: owning physical silver through the iShares Silver Trust (NYSEARCA: SLV) or investing in gold mining companies through the VanEck Gold Miners ETF (NYSEARCA: GDX). While both funds benefit from precious metals demand, their performance drivers and risk profiles differ significantly.

Two Different Ways to Invest in Precious Metals

SLV is designed to track the spot price of physical silver by holding bullion in secure vaults. Investors gain direct exposure to silver price movements without owning or storing the metal themselves.

GDX, on the other hand, tracks an index of major gold mining companies rather than physical gold. Its largest holdings include Newmont, Agnico Eagle Mines, and Barrick Mining, providing exposure to 57 mining companies worldwide. Because it owns operating businesses instead of bullion, GDX’s returns are influenced by both gold prices and company performance.

Performance Drivers Differ

Silver has enjoyed one of its strongest multi-year rallies, supported by both its role as an inflation hedge and growing industrial demand from renewable energy technologies.

Although SLV generated exceptional returns during the precious metals rally, its performance has closely mirrored fluctuations in silver prices. Following strong gains in previous years, the fund has experienced profit-taking as metals prices cooled during 2026.

Gold mining stocks generally respond differently. Rising gold prices often expand miners’ profit margins because production costs typically increase more slowly than commodity prices. This operating leverage can allow mining companies to outperform the underlying price of gold during sustained bull markets.

Income and Corporate Growth Advantages

Unlike SLV, which simply holds physical silver and does not generate income, GDX benefits from owning dividend-paying companies.

Mining companies also have opportunities to create additional shareholder value through operational improvements, acquisitions, production growth, and higher dividend distributions. These business decisions can enhance returns beyond movements in gold prices alone.

However, mining companies also face risks that physical bullion does not, including rising operating costs, labor challenges, regulatory changes, and execution risks that can pressure profitability during weaker commodity markets.

Costs and Investment Considerations

The two ETFs carry nearly identical expense ratios, with SLV charging 0.50% annually and GDX charging 0.51%.

For U.S. investors, tax treatment may also differ. Physical precious metal trusts such as SLV can be subject to collectibles tax rules, while equity ETFs like GDX generally receive standard capital gains tax treatment.

As a result, tax efficiency may favor GDX for certain long-term investors, depending on individual circumstances.

Closing Insights

Both SLV and GDX offer valuable exposure to the precious metals sector but serve different investment objectives. Investors seeking the purest exposure to silver prices may prefer SLV, while those looking for potential long-term capital appreciation, dividend income, and operational leverage may find GDX the more compelling choice. As precious metals continue to benefit from inflation concerns, central bank demand, and geopolitical uncertainty, understanding the different risk and return characteristics of these ETFs remains essential when building a diversified investment portfolio.