Gold’s record-breaking rally has quickly become one of the most talked-about developments in global markets this year. As the precious metal surged past the $4,000-per-ounce mark for the first time, investors are now wondering how much exposure to gold makes sense in a balanced portfolio. Its historical role as a hedge against inflation and geopolitical instability has only grown more attractive in today's economic climate. What’s especially notable is that this rise has come alongside surging stock markets, defying the typical inverse relationship between equities and gold.
This unusual momentum has sparked renewed interest in gold allocation strategies among investors of all types. Legendary hedge fund manager Ray Dalio recently reiterated his long-standing belief that roughly 15% of a portfolio should be allocated to either gold or bitcoin. According to several financial professionals, that recommendation holds merit in the current environment. David Miller, Chief Investment Officer at Catalyst Funds and portfolio manager of the Strategy Shares Gold Enhanced Yield ETF, supports a strong allocation, suggesting that at least 15% of a portfolio could be held in gold. He points to strong global demand, limited supply growth, and historically low real yields as primary factors pushing prices higher and sustaining bullish sentiment.
Not all experts are calling for such a large gold position, though. Will Rhind, CEO of GraniteShares, a firm managing $11 billion in assets, recommends a more moderate approach. He believes that most diversified portfolios should maintain gold allocations somewhere between 7% and 10%. That percentage, he adds, should still be large enough to meaningfully impact portfolio performance. Rhind cautions that allocations below 1% are unlikely to deliver significant benefits, emphasizing the need for a position size that actually moves the needle during market turbulence or inflationary periods.
Other voices in the financial community lean even more conservative. Alexander Lis, Chief Investment Officer at Social Discovery Ventures, advocates for a 5% gold allocation as part of a long-term portfolio split between stocks and bonds. For him, gold offers value as a non-correlated asset class, but the risk of overexposure lies in its dependence on specific macroeconomic conditions particularly fears around currency debasement and inflation. Lis warns that the recent surge in gold prices is driven more by investor expectations of future currency devaluation than actual monetary policy outcomes. For those expecting further government stimulus or weakening fiat currencies, gold may still rise. But if those fears are overstated, an oversized gold position could underperform.
The current rally, in Lis’s view, has priced in a significant degree of economic pessimism. To meet those expectations and sustain this momentum, markets would likely need fiscal stimulus on a scale that surpasses even the extraordinary measures taken during the COVID-19 pandemic. That scenario may be possible, but it’s not guaranteed.
Still, despite the debate over ideal percentages, one message is clear: gold remains a relevant and powerful tool in the modern investor’s arsenal. Whether it’s 5%, 10%, or 15%, financial professionals agree that a thoughtful gold allocation can act as a safeguard against economic uncertainty. As markets continue to price in a range of outcomes from inflation and interest rate shifts to global political unrest gold’s role as a strategic hedge has never been more prominent.
For investors wondering whether now is the time to increase their gold exposure, the answer depends largely on individual goals, risk tolerance, and the broader economic outlook. But as the metal pushes further into record territory, staying on the sidelines could mean missing out on one of the most significant safe-haven stories of the year.
