Gold fell below the key $1,300 level Thursday, raising new fears about whether the yellow metal's rally to begin 2014 is now over. Yet, mining companies fared well today, with silver specialists Hecla Mining (NYSE:HL) and Pan American Silver (NASDAQ:PAAS) posting solid gains of around 2% Thursday. What explains the disconnect that sent SPDR Gold Shares (NYSEMKT:GLD) down, but Market Vectors Gold Miners (NYSEMKT:GDX) up?

How metals moved today
In the futures markets, April gold fell almost $9 per ounce to settle at $1,294.70, while May silver fell another $0.07 per ounce, to $19.71, in lackluster trading. Most traders attributed the action Thursday to technical factors, with no strong fundamental news supporting a turnaround in the recent pullback in bullion prices. Palladium plunged, following its recent foray above the $800 per ounce mark with a sharp decline of 3% today.


Today's Spot Price and Change From Previous Day


$1,292, down $14


$19.70, down $0.04


$1,394, down $6


$756, down $23

Source: Kitco. As of market close.

Image sources: Wikimedia Commons; Creative Commons/Armin Kubelbeck.

Yet, the positive sentiment among silver miners showed just how uncertain investors are about whether bullion prices truly reflect the future of precious metals. Last night, Pan American Silver posted its fourth-quarter results, with revenue plunging 22% due to the big drop in silver and gold prices from last year's levels. Pan American also took a huge impairment charge related to the bullion price declines, leading to a loss for the fourth quarter.

One thing is clear to those who've followed the sector closely: The headwinds that hurt Pan American's results, as well as those of countless other silver miners, aren't exactly news. Indeed, after one more round of quarterly earnings, the terrible comparisons that resulted from the April 2013 plunge in gold and silver prices will finally end, allowing year-over-year figures to look a lot more favorable. That, in itself, won't help Pan American, Hecla, or other gold and silver miners get back to their pre-plunge earnings levels, but it could mark a turning point for investors if gold and silver prices are able to sustain their current levels rather than falling even further in 2014.

The key to understanding the potential divergence between bullion ETFs, like SPDR Gold, and mining stock investments, like the Market Vectors Gold Miners ETF, is that the focus of investors in each market is different. Bullion might well languish for months to come, but mining stocks will reflect the views of investors about precious-metals prices years into the future. Especially after their huge declines in 2013, mining stocks might well climb, even if the metals themselves do nothing more than sustain their current price levels.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.