Higher order: Gandalf or Balrog(s)

[pandora]

I had meant which were of the higher spirtual order, ie whom had the stronger spirits?

The balrog. Gandalf makes one attempt to directly challenge the balrog with magic and is almost knocked out by it; he does not try again. Since that's the only evidence about their spirit-strength I'd have to pick the balrog. Of course, Gandalf is more "spiritual" but that's obvious.