Written by Danny Guttridge

In the past year, SPDR Gold Shares (ARCA:GLD) has returned 9.2%, while the Market Vectors Gold ETF (ARCA:GDX) has dropped 23.4%. The former is the largest physically-backed gold ETF in the world, and the latter is the largest gold miners ETF, according to MarketWatch.

The difference in performance has been duly noted by both analysts and investors, and any bullish projection on the miners would be considered an intrepid decision. Street One Financial President Scott Freeze has made that decision though, saying, "If you look at miners on a historical basis, they go through periods of lagging gold futures and then a period of substantial outperformance. We've seen capitulation with the miners, we've already been there. Since the miners have already been lagging, they offer more upside than downside now compared to a fund like GLD."

He also states that inflation could explode sometime over the next 15 months because of the previous rounds of quantitative easing from the Federal Reserve, so gold is positioned to outperform other precious metals. If the gold miners take advantage of the timing of the possible reaction that gold could take, they could even beat out GLD's performance.

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Business Section: Investing Ideas
If the inflationary environment that Freeze believes in becomes reality, will gold or miners outperform? Below is a list of gold mining and exploration stocks that have seen institutional purchases over the current quarter. Do you think the metal or the companies are better investments?

List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)

1. Yamana Gold, Inc. (NYSE:AUY): Engages in gold and other precious metals mining and related activities, including exploration, extraction, processing and reclamation. Market cap is at $10.80B. Net institutional purchases in the current quarter is at 23.5M shares, which represents about 3.16% of the company's float of 742.77M shares.

2. Allied Nevada Gold Corp. (AMEX:ANV): Engages in the evaluation, acquisition, exploration and advancement of gold exploration and development projects in the state of Nevada. Market cap is at $2.63B. Net institutional purchases in the current quarter is at 3.2M shares, which represents about 3.92% of the company's float of 81.58M shares.

3. NovaGold Resources Inc. (AMEX:NG): Engages in the exploration and development of mineral properties primarily in North America. Market cap is at $1.47B. Net institutional purchases in the current quarter is at 12.2M shares, which represents about 7.5% of the company's float of 162.64M shares.

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Kapitall's Danny Guttridge does not own any of the shares mentioned above. Institutional data sourced from Fidelity.