First of all, apologies. The title of this column is misleading. Because of publishing turnaround times, I’m really dealing with last week’s market in gold, not this week’s.

No matter. Last week, this week: gold is gold. Gold excites passions. Some folk are enamored of the metal. Others regard it as a “barbarous relic.” Then there’s a more fair-minded contingent of investors who just regard gold’s utility as a diversifying portfolio allocation.

So, fair warning: this column aims to speak to those disinterested investors looking to derive the maximum benefit from gold’s current rally.

Spot bullion prices spiked 2.5 percent last week which doesn’t really sound like much of a move. Put that in context, though. See the chart below? It’s a weekly graph of the SPDR Gold Shares ETF (NYSE Arca: GLD), a proxy for gold bullion’s price. Last week’s action finally nudged GLD above its six-year downtrend line.

(Click on image to enlarge)

So gold’s a buy now, right? It’s early days, but the case for gold has certainly brightened technically. Keep in mind, though, that people buy gold for different purposes and in different ways. Bullion’s a sterile asset. It doesn’t spin off dividends or interest and, for many, it costs money to store and insure. Most people buy physical gold because they lack faith in the ongoing value of paper currency. Others are not so much interested in gold itself but like the way the metal interacts with their portfolio’s assets. Gold is a classic noncorrelated asset.

If you’re considering gold as a portfolio position, you’ve got a number of choices. Here’s a handful of the most popular investments: 

• SPDR Gold Shares ETF (NYSE Arca: GLD) — The largest exchange-traded product that directly invests in bullion. Because GLD’s net asset value is geared to the London afternoon fix, GLD tracks gold’s price closely.
• Credit Suisse X-Links Gold Shares Covered Call ETN (Nasdaq: GLDI) — This exchange-traded note attempts to turn gold into an income-producing asset by nominally writing covered calls on GLD shares. Call writing is ideal for a neutral-to-slightly bullish market because it gives away the opportunity to participate gold’s significant upside gains. 
• PowerShares DB Gold Fund (NYSE Arca: DGL) — Instead of trading in bullion, DGL invests in gold futures using an optimization model to minimize the deleterious effect of continuously rolling contract positions forward. 
• VanEck Vectors Gold Miners (NYSE Arca: GDX) — GDX is not a pure play on gold: about three-quarters of its price action can be explained by gyrations in the cost of bullion. GDX tracks a market cap-weighted index of global mining outfits.
• VanEck Vectors Junior Gold Miners (NYSE Arca: GDXJ) — Like its older brother GDX, this fund is a cap-weighted index tracker. The “junior” designation refers to the fund’s original target of smaller-cap mining firms. This puts the fund one step more removed from bullion: less than two-thirds of GDXJ’s day-to-day pricing is driven by gold.  

So how do these investments compare? Well, past performance is no guarantee of future results, but it can be instructive. Take a look at the annual returns netted by the five exchange-traded products recently.

Annual Returns (July 2014 – July 2017)

Returns for 2014 are annualized based on monthly results from July through December; 2017 results are annualized from January through July monthly returns.

One thing’s clear: you get a lot more “bang!” out of gold mining shares. For better and worse.The junior miners fund, for example, lost 43 percent in 2014, taking until June 2016 to claw its way back to breakeven. As it turned out, 2016 was a banner year for mining shares. GDXJ end up 73 percent by New Year’s Eve.

Imagine investing in mid-2014. Would you have had the stamina to withstand a withering loss at the outset? Would the following year’s loss grind on you further? Would you have bailed out of your position or hung on in the hope of reaching breakeven or bagging a gain? Good questions to ponder as you consider today’s market.

If last week’s momentum persists, GDXJ has the technical potential to reach the $44 or $45 level. That’s about 23 percent higher than Friday’s close. Nobody, of course, can say with certainty what heights gold or gold miners may ultimately attain. Or, for that matter, what trials and tribulations* must be endured along the way. Knowing the past, it’s safe to say that it’ll be a heck of a trip either way.

*Keep in mind that owning GDX or GDXJ increases your portfolio’s exposure to stock market risk; the other exchange-traded products don’t convey this risk.