I could be wrong here but this was my thinking.

GLD has taken money that might have been invested in physical metal and caused it to be invested in paper instead. They claim to be backed by physical but when one reads their prospectus there are many opportunities for them to be in line with their prospectus but not have the actual physical metal to back the fund.

Most of the older style mutual funds when tracking an index such as the DOW 30 would actually take the money a person invested (along with that of others) and go into the market and buy the shares representative of their weighting in the index. This promoted sale of the stock and increased the price for all shareholders.

I believe (and could be wrong as I have never seen the methods used explained in detail) that many newer style funds like RYDEX, USO,UNG (I hope I have the symbols right I didn't check) track the index but don't trade the shares to do so, rather they make trades in futures markets on an ongoing basis which attempt to track the index. Usually they do this quite well but it is of lesser or no benefit to the shareholders of the companies represented by the index.

If the junior gold producer index works in such a fashion and does not actually purchase the shares they track, then money that would have gone into those shares to raise the price will not do so. It will go into some paper asset that will enable the fund to track the price but without full benefit to the price; hence the sector itself, while it gets attention gets less money.

I hope I am wrong and that the introduction of the index will be a positive for the sector but I have gotten to the point where I trust very little that is done with paper these days as the whole world is so crooked it cannot be made straight. I haven't read the links you supplied yet. I have copied them and will get to them later. Thank you for that. Perhaps they will adjust my thinking. That would be pleasant.

P.