New York — Gold mining shares and ETFs such as Market Vectors Gold Miners remain a good choice for investors, even as gold prices have trouble rallying.

Driven by widespread financial panic and a desire for stable investment opportunity, gold prices steeply ascended in May and June thanks to demand from American and East European markets. Yet very recently, gold futures dipped in response to stronger U.S housing reports, as well as a recent set of European bank stress tests that took place last week, showing signs that, as fears of economic meltdown gradually subside, the yellow metal's price acceleration may cool down.

In another example, the most actively traded gold contract, specifically for December delivery, dropped by $4.60, or roughly .4 per cent, settling at $1,187 an ounce on the Comex division of the NYSE. Furthermore, U.S. Treasury prices dropped in response to government data that showed a rebound in homes sales last month.

Overall, both trends suggest a recent increase in market confidence, which may, in fact, erode the high gold prices we have observed over the past few months. In short, as less concerned investors detach themselves from the refuge and financial comfort of gold holdings, the steep price spiking may simmer down relative to the past few frenetic weeks. This has also caused the miners to underperform in July, but that doesn't make them a bad investment.

Canada First

As I have mentioned in past articles, this fund and its junior miners sibling, Market Vectors Junior Miners ETF , give investors the opportunity of ETF coverage on either established operations or more volatile explorers and small producers.

In terms of national diversification, Canadian companies lead the fund's holding percentages, representing a substantial 60.2 per cent of the fund's total securities.

Meanwhile the U.S., South Africa and Peru follow in terms of country-weighting, each accounting for 13.9 per cent, 13.2 per cent and 4.3 per cent of the fund's total holdings, respectively.

In terms of top holdings, GDX's largest players include Barrick Gold with 16.3 per cent, Goldcorp with 11. 9 per cent, Newmont Mining with 10.8 per cent, Anglogold Ashanti with 5.9 per cent and Kinross Gold with 4.8 per cent.

Over the past year, GDX gained 23.5 per cent and it is up 6.5 per cent thus far in 2010. That compares to a 14.7 per cent gain and a 0.5 per cent loss over the same period for SPY.

Fidelity Select Gold

Fidelity Select Gold offers similar exposure. In terms of country diversification, FSAGX is largely rooted in Canadian gold corporations, with 50.6 per cent of the fund's assets designated to Canadian companies and 17.2 per cent to American holdings. Other noteworthy nations include South Africa (11.2 per cent), Australia (7.0 per cent), and the United Kingdom (6.3 per cent).

Almost mirroring GDX's allocation, FSAGX's top five holdings include Barrick , Gold Corp, Newmont, Anglogold Ashanti, and Randgold Resources .

In its entirety, FSAGX contains 107 individual holdings, and is relatively top heavy, with the top 10 holdings within the fund comprise 62.3 per cent of its total assets. In terms of performance, FSAGX has very similar returns to GDX too, up 23 per cent in the past year and 6.6 per cent in 2010.

Either fund is a good choice this week ahead of several earnings announcements. The three largest holdings in both funds, ABX, NEM and GG, all report earnings this week, as do Agnico-Eagle Mines and Eldorado Gold .

Even though gold prices have been flat over the past month, stalling the rally in gold miners, the price of gold remains elevated. That should translate into stronger earnings for the gold mining companies, which could lead to higher stock prices.

However, thus far investors haven't rewarded the companies for higher earnings. Instead the stock prices have tended to follow the metal. Therefore, unless we see an earnings rally this week, investors may be stuck following the price of gold. For long-term investors, that provides the opportunity to pick up shares at less than their full value.