Here's a warning for investors who believe they have the Midas touch: Not all gold ETFs are guaranteed to shine.

Van Eck's Market Vectors Gold Miners ETF ( GDX) had traded on the American Stock Exchange for only one session last month when the World Gold Council reported some seemingly great news. Gold investment demand through ETFs jumped 59% in the first quarter of 2006 from a year earlier, the council's data showed.

For gold investors, the news wasn't particularly surprising, given that the returns on the market-dominant gold ETF, the streetTRACKS Gold Shares ( GLD), were up 25% for the year as of May 23, the date of the WGC's release. The other main ETF linked to gold, the iShares Comex Gold ( IAU), was up in a similar amount. Meanwhile, the money managers at New York-based Van Eck, seeking to capitalize on the success of streetTRACKS Gold Shares, had launched the Market Vectors Gold Miners ETF in hopes that investors would find the miners as enticing as the metal.

The new mining ETF is up about 2.4% from its first day of trading May 22, while gold prices have fallen about 1.6% amid a widespread commodities downturn. But some observers say that Van Eck's new baby doesn't have what it takes to achieve the type of longer-term success exhibited by the streetTRACKS Gold Shares.

George Milling-Stanley, the WGC's manager of investor and market intelligence, sees higher gold prices down the road, but he remains skeptical about how well the gold miners ETF will fare, given the competition from other investment strategies.

"What investors in Van Eck's vehicle are offered is a new and easier way to do something that they could already do, rather than something that they couldn't do," he says. In other words, investors already have had access to gold-mining shares through mutual funds or through purchasing the stock directly.

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