How to Generate High Yields and Monthly Income from Gold ETFs
Gold hit an unprecedented milestone late in January 2026, climbing above $5,000 per ounce as investors piled into the metal amid escalating global uncertainty, and weakening faith in the U.S. dollar’s role as the world’s anchor currency.
Safe-haven demand has been intense, driven by a mix of political and economic stressors. President Donald Trump’s erratic foreign policy — including threats to annex Greenland and heightened trade tensions from tariffs — has rattled alliances and strained confidence in the dollar.
Central banks and sovereigns have responded by diversifying reserves away from the dollar, a long-running trend that saw the U.S. share of global foreign exchange reserves fall significantly from its post-Bretton Woods peak decades ago. But the geopolitical backdrop isn’t limited to foreign capitals.
Domestic unrest following multiple high-profile ICE killings in Minnesota and the raid in Venezuela that led to Nicolás Maduro’s capture have added to risk aversion across markets. Across continents, these political pressures have bolstered ’s appeal as a store of value and hedge against geopolitical risk.
This dynamic is part of why gold and other precious metals have been surging. But soaring prices alone aren’t the whole story for investors. What matters as much — especially for income-focused strategies — is how volatile precious metals have become.
Large price swings create opportunities beyond simply holding the metal. With ETFs and liquid markets, investors can now use options-based strategies to turn volatility into cash flow, effectively monetizing price swings rather than relying solely on price appreciation.
That income potential comes with trade-offs for capped upside price appreciation. But for investors focused on generating high yields and monthly income, ETFs have opened the door for turning a traditionally non-yielding asset class into a meaningful cash-flow play.
With that in mind, here are two ways gold ETFs are currently being used to generate high yields and monthly income.
Our first option for generating income from gold uses GLD, the largest gold ETF in the world with roughly $172 billion in assets under management. GLD is structured as a grantor trust and holds physical gold bullion in direct, audited custody.
GLD charges a 0.40% expense ratio and is extremely liquid. The ETF consistently trades with a 30-day median bid–ask spread of around 0.01%, making it well suited for options-based strategies. Its options market is among the deepest in the ETF universe, with weekly expirations and a wide range of strikes.
As of January 26, GLD is trading around $468 per share. Writing covered calls therefore requires owning at least 100 shares, or roughly $46,800 in capital.
If the objective is monthly income, one straightforward approach is to sell a slightly out-of-the-money call. Looking at the February 27 expiration, selling the $470 strike currently generates about $17.52 per share in premium, or $1,752 per contract before taxes and commissions.
Against a $46,800 position, that represents a one-month yield of approximately 3.7%. Annualized, assuming similar premiums could be earned each month, that implies a theoretical yield of roughly 45%. The trade-off is clear. Upside is capped almost immediately at $2 per share, and if gold continues to surge, shares may be called away near the current price.
That risk matters in a strong bull market. Premiums are elevated right now because volatility is high. If volatility collapses, future option income could fall sharply. There is also downside risk. If gold pulls back hard, you could be left holding GLD at $468 per share, with the option premium offering only partial downside protection.
Investors who want to preserve more upside can move further out of the money. Using the same February 27 expiration, selling the $500 strike generates roughly $7.55 per share, or $755 per contract.
On the same $46,800 capital outlay, that works out to a monthly yield of about 1.6%, or roughly 19% annualized on a theoretical basis. In exchange for lower income, you retain nearly $32 per share of upside from current levels, while still collecting a decent premium.
Remember, higher income requires giving up more upside and accepting tighter margins for error. Lower income preserves more participation if gold continues to run.
Compared with spot gold, gold mining equities tend to show a strong correlation to the underlying metal, but with higher sensitivity. That is a function of operating leverage.
When gold prices rise, miners benefit from expanding margins as revenues increase faster than largely fixed operating costs. When prices fall, the same leverage works in reverse.
GDX tracks the MarketVector Global Gold Miners Index and charges a 0.51% expense ratio. It is well established, with roughly $31 billion in assets under management, and is extremely liquid.
Unlike physical gold ETFs, miners also generate some cash flow. GDX currently carries a modest yield of about 0.22% on a 30-day SEC basis, reflecting dividends paid by its underlying holdings.
The 30-day median bid–ask spread sits around 0.01%, putting it on par with some of the most actively traded ETFs in the market. Like GLD, GDX has an active options market with weekly expirations, but its lower share price reduces the capital required to implement covered-call strategies.
As of this writing, GDX is trading around $112 per share. Owning 100 shares requires approximately $11,200 in capital, less than one quarter of the capital needed for a comparable strategy using GLD. Looking at the February 27 expiration, selling a slightly out-of-the-money $115 call generates roughly $5.30 per share in premium, or $530 per contract before taxes and commissions.
That represents a one-month yield of about 4.7%. Annualized, assuming similar premiums could be earned each month, that works out to roughly 57%. In this structure, you also retain upside participation up to $115, or about $3 per share, in addition to the option premium.
If you expect gold miners to continue running and want more upside, you can move further out of the money. Selling the $120 strike for the same February 27 expiration drops the premium to about $3.86 per share, or $386 per contract.
That still represents a monthly yield of roughly 3.4% on the $11,200 capital outlay, which annualizes to about 41%. In exchange, you preserve roughly $8 per share of upside from current levels.
GDX versus GLD comes down to exposure and risk tolerance. GLD offers purer exposure to gold prices with lower operational risk, but requires significantly more capital per contract. GDX lowers the capital hurdle and typically offers richer option premiums, thanks to higher volatility and equity market risk.
The trade-off is that miners can underperform gold during equity drawdowns, even if the metal itself holds up. For covered-call strategies, GDX can be more capital efficient, but it also demands a higher tolerance for volatility and drawdowns.
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