It's been a challenging year for gold and the related ETFs. Fading hopes for Fed rate cuts are pressuring the yellow metal and shifting the story to interest rates.
I maintain a buy rating on NEOS Gold High Income ETF (IAUI), favoring its covered call strategy for income-focused gold exposure. IAUI offers a 12% distribution rate, primarily as return of capital, providing significant tax advantages for taxable accounts. The fund's income and NAV are variable, scaling with gold's price; downside is cushioned, but upside is capped by the options overlay.
The ongoing conflict in Iran has been a drag on gold prices, frustrating investors who believed the commodity would stand tall during times of geopolitical turmoil. Gold's recent woes are easily explained.
Gold has pulled back roughly 21% from its late-January peak of nearly $5,600, yet analysts maintaining $10,000 price targets by end of decade are holding firm.
Gold prices tumbled last week, belying the asset's historical reputation as a safe-haven destination during times of geopolitical strife. As just one example, the largest ETF backed by physical holdings of the commodity posted a weekly slide of 10.51%.
Gold pays no income. That is the trade-off every investor accepts when they buy a traditional gold ETF.
Market uncertainty and elevated risks favor defensive positioning over growth-focused indices like the S&P 500 and Nasdaq-100. Because of all of this uncertainty, the overall volatility levels have increased, making option-based strategies more attractive. I see a huge merit in deploying capital into OTM covered calls, which strike the balance between defense and exposure to rich option premium income.
Gold's indomitable run has carried over into 2026 and the stars are aligning for more upside. Attribute some of that bull case to strong gold ETF inflows around the world.
In any given year, hundreds of new ETFs come to market. One fund that stood out in 2025 is the NEOS Gold High Income ETF (IAUI), which debuted last June.
NEOS Gold High Income ETF earns a Buy rating for its strong drawdown mitigation and income generation, especially in flat or volatile gold markets. IAUI's dynamic, actively managed covered call strategy leverages synthetic gold exposure, freeing cash for money markets and treasuries to enhance returns. The current portfolio structure uses partial, laddered call coverage, balancing upside participation with premium income and risk management.
Following a year in which gold notched more than 50 record highs, some investors may be apprehensive about how much bullishness the yellow metal has left in its 2026. Fortunately, the prevailing wisdom among banks and other professional market participants is that gold is in for another impressive showing in 2026.
NEOS Gold High Income ETF (IAUI) offers exposure to gold and U.S. government debt, enhanced by a covered call strategy for high income. IAUI delivered a 15.5% total return since inception, outperforming long bonds but underperforming gold due to capped upside from options. I rate IAUI a buy, favoring its income generation in a rangebound-to-bullish gold environment, with a 6.87% yield and tactical covered calls.