"What's better: gold or gold mining stocks?" I'm asked this question often at cocktail parties, but people aren't always pleased with the answer I give: "It depends."

For most of the past 12 months, gold stocks had the upper hand, at least as measured by the ratio of the two most popular exchange-traded funds tracking mining shares and bullion. In February 2009, the price of the SPDR Gold Shares Trust (NYSE Arca: GLD) was nearly 3x higher than that of the Market Vectors Gold Miners ETF (NYSE Arca: GDX). But over the course of the ensuing seven months, GLD's price multiple sank in stair-step fashion toward 2x, indicating greater price appreciation in gold stocks than in gold itself.

GLD/GDX Ratio

Cocktail party revelers, I've found, aren't particularly interested in things past, but instead are usually focused on where things are likely to go. And from the perspective of the GLD/GDX ratio at least, it looks as if bullion and bullion proxies, not mining stocks, are the better bet now. The ratio has rebounded now, such that it's crossed to the upside of its 50-day and 200-day moving averages.

So does this mean you should abandon your gold stocks and buy gold grantor trust shares? Well, not necessarily. The GLD/GDX ratio only indicates relative strength. Bullion is in the stronger momentum play presently, but there could still be more upside in gold mining shares. After all, there's a 75 percent correlation between the price movements of the miners fund and the metal-holding trust.

There's another telling statistic about gold miners, though, that investors should heed: beta. Beta is a measure of relative volatility. When you compare the variance in GDX prices against GLD, you'll find that miners are a lot riskier than bullion—in fact, by a factor of 1.69. Simply put, a 1 percent change in the price of gold would likely engender, on average, a 1.7 percent shift in the price of the mining ETF.

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