$10,000 Gold Is a Threat to This Ultra-High Yield ETF

"IAUI launched June 4, 2025 and has gathered roughly $396 million in assets in under a year. Its objective is straightforward: generate high monthly income with the potential for appreciation based on exposure to exchange-traded products that have direct exposure to gold."

"The fund holds roughly 63% in U.S. Treasury Bills, uses those as collateral for synthetic gold exposure, and holds about 24% in the Goldman Sachs Physical Gold ETF. The remaining slice is an active options overlay that sells covered calls against gold positions to generate monthly distributions."

"Ed Yardeni, president of Yardeni Research, is 'sticking with $10,000 by the end of the decade,' even after lowering his year-end 2026 forecast to $5,000 per ounce. The structural drivers include persistent geopolitical uncertainty, continued central bank demand, and sustained inflows from Asian gold ETF investors."

"A sustained, multi-year gold rally is the worst environment for a covered call income strategy, as IAUI underperforms during strong gold rallies but has milder drawdowns."

Gold has decreased by 21% from its January peak, yet analysts maintain a $10,000 target by the decade's end. NEOS Gold High Income ETF, launched in June 2025, aims to generate high monthly income through gold exposure but is penalized during gold surges. The fund holds 63% in U.S. Treasury Bills and 24% in Goldman Sachs Physical Gold ETF, delivering a 12.2% annualized dividend yield. Analysts note that while IAUI underperforms in strong gold rallies, it offers milder drawdowns, making it less favorable in a prolonged gold rally scenario.

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