Bridgewater Associates founder Ray Dalio has once again stirred the debate over safe-haven assets. Speaking at the Greenwich Economic Forum, Dalio stated that gold should make up to 15% of investment portfolios, especially now that its price has surpassed an all-time high of $4,000 per ounce.

“Gold is an excellent diversifier,” Dalio said. “When traditional assets decline, gold often performs well.”

A return to the 1970s: high debt, inflation, and uncertainty

According to Dalio, the current situation mirrors the economic turmoil of the 1970s, when inflation, massive government spending, and soaring debt destroyed confidence in paper currencies.

“Today’s environment is very similar to that period — where do you actually put your money?” Dalio asked. “When you hold cash or bonds while governments keep expanding their debt, that’s a poor way to store wealth.”

Record gold rally amid investor flight

Gold futures have now reached $4,005.80 per ounce, representing a more than 50% increase this year. Investors are rushing to gold as a hedge against global tensions, fiscal deficits, and rising sovereign debt.

Dalio’s advice challenges the traditional 60/40 portfolio model (stocks vs. bonds), calling it outdated in today’s volatile environment. “Gold is the only asset you can hold without relying on anyone else to pay you,” he emphasized.

Others share his view

Jeffrey Gundlach, CEO of DoubleLine Capital, echoed the sentiment, suggesting that investors allocate as much as 25% of their portfolios to gold. He expects the metal to continue shining as inflation accelerates and the U.S. dollar weakens.

UBS analysts have raised their 2025 gold inflow forecast from 450 to 830 metric tons, though they warn that stronger U.S. growth or unexpected Fed rate hikes could slow the rally.

Meanwhile, Goldman Sachs projects a 6% increase in gold prices by mid-2026. Analyst Lina Thomas noted that emerging-market central banks are still “underweight in gold compared to developed nations,” but are rapidly diversifying. According to the World Gold Council, nearly 95% of central banks expect global gold reserves to grow in the coming year.

Jewelry sector under pressure

The gold rally has a downside — it’s squeezing the jewelry industry. Companies like Pandora and Signet report rising production costs and shrinking profit margins. Pandora’s profits dropped by 80 basis points, while Signet’s September sales fell 7% year-over-year, blaming a 30% rise in gold prices.

As a result, many brands are turning to gold-plated or “semi-fine” jewelry. BaubleBar co-founder Daniella Yacobovsky said:

“Consumers are looking for quality at a fair price. Gold-plated pieces let them get the look and feel of real gold without paying the full price.”

These pieces typically sell for $50 to $150, attracting shoppers who once bought solid gold jewelry.

On the luxury side, designer Alexis Bittar says his wealthy clientele is still buying, while middle-income consumers are pulling back. “Consumers are vaguely aware that gold prices are rising,” he said. “But once you go past their mental spending limit, they simply stop buying.”

Gold thus remains a paradox of today’s economy — for some, it’s a shelter from the storm, while for others, it’s a burden on business. But as Ray Dalio puts it:

“When the world shakes, gold remains the one thing no one can devalue.”

#RayDalio , #GOLD , #Inflation , #economy , #worldnews

Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!

Notice:

,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“