Ray Dalio Sees Gold as Safer Than the US Dollar

Bridgewater Associates Founder Ray Dalio weighs in on the state of the US economy and the five forces he sees impacting domestic and global markets today.

He speaks with Bloomberg's Lisa Abramowicz at the Greenwich Economic Forum.

Billionaire Ray Dalio said that gold is “certainly” more of a safe haven than the US dollar and the metal’s record-setting rally echoes the 1970s, when it surged during a time of high inflation and economic instability.

The remarks from Dalio — who founded the hedge-fund firm Bridgewater Associates — came during an appearance at a conference on Tuesday, when he was asked whether he agreed with the view of Citadel’s Ken Griffin that gold’s rise reflected anxiety about the US currency.

“Gold is a very excellent diversifier of the portfolio,” Dalio said during a panel discussion with Bloomberg’s Lisa Abramowicz at the Greenwich Economic Forum in Connecticut. “So if you were to look at just from the strategic asset allocation mix perspective, you would probably have as the optimal mix something like 15% of your portfolio in gold.”

The federal government shutdown and speculation that the Federal Reserve will keep cutting interest rates even as inflation remains elevated has pushed the price of gold up by more than 20% since the end of July to roughly $4,000 an ounce. Meanwhile, the dollar has weakened against every major currency this year after the uncertainty unleashed by President Donald Trump sent it into the biggest slide since the 1970s, not long after the US abandoned the gold standard.

Dalio said he sees gold as a strong store of value at a time of rising government debt burdens, geopolitical tensions, and the erosion of confidence in the stability of national currencies.

He noted that gold’s resurgence mirrors the early 1970s, when it also rose in tandem with stocks.

He expressed reservations about the scale of the stock market’s recent rise, which has stoked concern about an artificial-intelligence bubble as valuations have soared.

“This is something that feels frothy to me,” Dalio said.

Dalio said the speculation around AI has the hallmarks of a bubble and drew parallels to past innovation booms, from the late 1920s, when patent activity and technological breakthroughs fueled speculative excess, to the dot-com era of late 1990s.

Still, he said he continues to see opportunities to seize on the benefits of AI, either through companies that will use it to produce large efficiencies or those who will provide platforms for the technology. And he said he’d be wary of betting against the megacap tech companies despite his reservations about valuations.

“I wouldn’t want to be short the super-scalers,” he said.

Internationally, Dalio said he still likes China. But he said “there’s a greater amount” that he’s investing in the US.

“I think and both have their challenges and their benefits,” he said. “If I’m looking at China, it’s relatively inexpensive — but, at the same time, capital flows and other issues also make it a problem.”

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