by Ian Cooper
With Israel-Iran conflict uncertainty, gold rallied to $3,440.
And there’s still more upside.
“Israel knocking out Iranian targets is causing a little bit of geopolitical scare in the market. Prices will stay elevated in the anticipation of what is to come, the retaliation by Iran,” said Daniel Pavilonis, senior market strategist at RJO Futures, as quoted by Reuters.
That, plus central bank buying could easily send the metal to $4,000.
In fact, Goldman Sachs says gold could rally to $3,700 by the end of 2025, and to $4,000 by the middle of 2026. Even UBS analysts say gold could rally to $3,500 by December. According to analysts at JPMorgan, “The bank now expects gold prices to reach an average of $3,675/oz by 4Q25, on the way towards above $4,000/oz by 2026, with risks skewed towards an earlier overshoot of these forecasts if demand surpasses its expectations,” as reported by Reuters.
And remember, China’s central bank added to its gold reserves in May for the seventh straight month. And, as noted by CNBC, “The world’s central banks are on track to buy 1,000 metric tons of gold in 2025, which would be their fourth year of massive purchases as they diversify reserves from dollar-denominated assets into bullion, consultancy Metals Focus said.”
In short, gold is offering investors a substantial opportunity.
While investors can always buy gold ETFs such as the VanEck Gold Miners ETF (GDX), or even gold stocks, such as Newmont (NEM), they can gain exposure to gold and receive a monthly yield of 2.77% with the YieldMax Gold Miners Option Income Strategy ETF (GDXY).
The fund – which has an expense ratio of 0.99% – is able to maintain that consistent yield by generating monthly income by selling/writing call options on the GDX ETF.
Just so you know, writing call options involves selling the right to buy as asset at a fixed price in a set time frame. It also helps generate income through premiums received.
That’s a lot of technical jargon. But it’s what allows the GDXY to pay its dividends.
All you have to do is buy the ETF, collect its 3.38% yield, and benefit from price appreciation without ever having to trade or write a call option.
Even more impressive, the ETF even managed to outperform gold since the year began.
We also have to consider that gold mining stocks don’t just follow gold prices.
They often outpace them.
That’s because when the price of gold rises, miners tend to see wider profit margins and an increase in free cash flow.
In addition, a noted by Capital.com, “Gold miners have traditionally outperformed bullion in bullish markets, due to the way these companies use their operating leverage in order to increase profits, which leads to a boost in share prices. Thus, this is largely due to profit expansion, as miners are able to sell appreciating gold fairly quickly, thus avoiding a decline in prices, whereas their own operational costs rise much more slowly.”
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