An ETF Gold Mine Launches

Gold is glittering again in the ETF world.

The Market Vectors-Gold Miners(GDX) exchange-traded fund began trading Monday on the Amex. The new ETF, designed to track the performance of the Amex Gold Miners Index, is the first exchange-traded fund in the U.S. offering investors exposure to the gold-mining equity market, as opposed to just the metal itself.

There currently are two ETFs on the market providing direct exposure to gold bullion, streetTRACKS Gold(GLD) and the iShares Comex Gold Trust(IAU). Holders of those funds own shares that each represent a fraction of the price of an ounce of gold.

The Market Vectors-Gold Miners ETF, however, provides exposure to the metal through gold-mining companies such as Newmont Mining(NEM) and Goldcorp(GG). Investors receive additional leverage by owning shares of the miners instead of the metal itself.

Like other ETFs, the Market Vectors-Gold Miners ETF trades like a stock and may also be sold short, thereby acting as a speculative hedging investment.

Van Eck Global has long been a player in precious metals and other commodities. For example, in 1968, it introduced the nation's first gold mutual fund.

"We at Van Eck believe that the vulnerability of the U.S. dollar, the twin deficits and other financial imbalances could lead to economic stress that supports a continued positive view on gold-related investments," said Joseph Foster, a fund manager for Van Eck gold since 1996, in a statement. "The Market Vectors-Gold Miners ETF is designed for investors looking for the traditional diversification benefits of gold-related investments, as well as the liquidity that intraday-trading access provides."

The GDX recently was down 53 cents, or 1.4%, to $35.99 amid a sharp selloff in the overall commodities market. Gold is down about 1% for the day to $654 an ounce.

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