Legendary investor Ray Dalio has once again enunciated the importance of Gold in portfolios. A video clip shared on social media platform
Dalio’s comments arrive at a time when investors are grappling with elevated geopolitical risks, rising debt levels, aggressive monetary interventions, and growing uncertainty about the long-term stability of currencies. In such an environment, Dalio argues that investors often focus on the wrong thing: the daily spot price of gold, rather than its strategic purpose.
As per Dalio, gold plays a fundamentally different role compared with equities or bonds. It is not designed to grow wealth during good times, but to protect it when markets break down and other parts of a portfolio are under stress.
He highlighted that gold has historically performed well during periods when traditional assets struggle. Whether it is inflation, deflation, or economic stress, gold has tended to act as a stabilizing force. This, he says, is precisely why investors should think about gold from a portfolio-construction perspective rather than a trading lens.
How much gold belongs in every portfolio?
Dalio believes investors pay far too much attention to the price of gold and far too little attention to allocation. Dalio suggests that, depending on the overall structure of a portfolio, gold should typically make up between 5% and 15% of total assets. The exact percentage, he says, depends on how exposed the rest of the portfolio is to economic cycles and financial shocks.
He emphasized that gold functions as both a diversifier and a form of financial insurance. When equities, bonds, or other risk assets struggle, gold has historically shown the ability to hold value or even outperform. This counter-cyclical behaviour, he says, is what makes gold indispensable in a well-constructed portfolio.
Dalio also underlined gold’s effectiveness as a diversifier. When equities and other risk assets fall sharply, gold has often moved in the opposite direction or held its value. This makes it particularly useful during periods of crisis, when correlations between assets tend to rise and diversification across traditional instruments fails.
Dalio stressed that gold’s true value emerges during periods of instability, when confidence in monetary systems weakens.
He pointed to history to reinforce his argument. During the inflationary turmoil of the 1970s, gold delivered returns that outpaced most asset classes. Similarly, during the deflationary collapse of the 1930s, gold again proved to be one of the strongest performers. The common thread in both periods was not inflation or deflation, but systemic stress and monetary instability.
Gold Price Today
Gold prices inched up on Thursday, supported by a weaker dollar and renewed safe-haven buying as investors remained cautious amid uncertainty surrounding US tariff policy and ongoing US-Iran discussions.
Spot gold rose 0.5% to $5,195.99 per ounce as of 0639 GMT. The precious metal had touched a more than three-week high earlier this week on Tuesday.
Meanwhile, US gold futures for April delivery edged lower by 0.2% to $5,213.50 per ounce.
Who is Ray Dalio?
Ray Dalio is the founder of Bridgewater Associates, the world’s largest hedge fund for much of the past two decades. Known for his deep macroeconomic insights, Dalio has built a reputation for studying economic cycles, debt crises, and monetary systems across centuries. He is also the author of bestselling books such as Principles and Principles for Dealing with the Changing World Order, where he outlines his framework for understanding markets, power shifts, and long-term investing.
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