The application of the Powder Metallurgy (PM) method is confirmed as a production technology for gears and other mechanical parts. The PM method offers lightweight, repeatability with high precision, maximum material use, freedom of design, cost efficiency, and sustainability. Condition Monitoring (CM) is an important strategy to adopt in different gear systems. The current paper studies the possibility of crack detection for steel and PM gears to investigate the effect of having different gear materials on fault detection possibility. Four different statistical indicators, namely the RMS, kurtosis, peak value and crest factor are studied. The study is based on calculating Tooth Varying Mesh Stiffness (TVMS) using a calculation model and generating the system dynamic response using a gear dynamic model. Different fault detection indicators are applied to examine the detection possibility with crack propagation. The paper concludes on how having different gear materials has an impact on the fault detection possibility.