Ray Dalio & UBS Analysts: Why Gold Should Dominate 15% of Your Portfolio in 2025 as Prices Soar Past $4,000

Why Are Ray Dalio and UBS Bullish on Gold in 2025?

Ray Dalio, founder of Bridgewater Associates, isn’t mincing words: “Gold is a *fantastic* diversifier,” he declared at the Greenwich Economic Forum. His advice? Allocate up to 15% of your portfolio to gold, especially as traditional assets wobble under inflation and debt. UBS analysts echo this, revising their 2025 Gold inflow forecast to 830 metric tons—nearly double their initial estimate. The rationale? A toxic cocktail of fiscal deficits, geopolitical strife, and currency debasement. “It’s 1970s déjà vu,” Dalio quipped, referencing an era when gold outpaced stocks and bonds by a mile.

Gold vs. the 60-40 Portfolio: A Clash of Strategies

The classic 60-40 stock-bond split is getting a reality check. Dalio calls it outdated in today’s climate, where gold’s “no-counterparty-risk” edge shines. Jeffrey Gundlach of DoubleLine Capital goes further, pushing for 25% allocations. Even Goldman Sachs predicts a 6% price jump by mid-2026. But here’s the kicker: gold doesn’t pay dividends. So why the hype? “It’s the only asset that doesn’t rely on someone else’s promise to pay,” Dalio argues. Translation: When trust in paper assets erodes, gold becomes the ultimate insurance policy.

How High Can Gold Go? The $4,000 Benchmark and Beyond

Gold futures hit a jaw-dropping $4,005.80/oz this week—up 50% year-to-date. UBS flags risks (like a Fed rate hike), but demand is bifurcated: “conviction buyers” (central banks, long-term holders) and “opportunistic traders” chasing dips. Case in point: Emerging market central banks are still underweight gold but are accumulating fast, per the World Gold Council. Meanwhile, retail investors face sticker shock—jewelry brands like Pandora and Signet are hiking prices or pivoting to gold-plated alternatives to preserve margins.

Jewelry Industry Feels the Squeeze: Gold’s Double-Edged Sword

Record prices are crushing jewelry margins. Pandora’s Q2 profits took an 80-basis-point hit, while Signet’s sales dropped 7% YoY. Brands like BaubleBar are thriving with “demi-fine” (gold-plated silver) pieces at $50–$150, but CEO Daniella Yacobovsky admits volatility is “unlike anything we’ve seen.” For consumers, it’s a psychological battle: “They have a mental price ceiling,” says Alexis Bittar, noting middle-class pullback while the wealthy keep spending.

FAQs: Your Gold Questions, Answered

Why is Ray Dalio recommending 15% gold allocations?

Dalio sees gold as a hedge against monetary debasement and geopolitical risks, akin to its role in the 1970s inflation crisis.

What’s driving gold to $4,000/oz?

A mix of inflation fears, debt concerns, and central bank buying—UBS projects 830 metric tons of inflows in 2025.

How are jewelry brands adapting?

Many are shifting to gold-plated designs or absorbing cost hikes, though margins are suffering (e.g., Pandora’s 80bps profit drop).