Investor insurance: what do Buffett, Dalio and other gurus advise to do with gold?

Gold set a new all-time high, rising above $3900 on October 1 amid the U.S. government shutdown. Since the beginning of the year, the metal has risen in price by more than 45%, outperforming other traditional protective assets. More than 80% of Wall Street analysts surveyed by Kitco News Gold expect further gains in the short term. Whether it's too late to buy this metal and what share to allocate to it in the portfolio - are speculated by prominent investors and major investment banks.

One of the most consistent supporters of gold is Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates. He warns that soaring U.S. debt could send the economy into a "heart attack" - a sharp crisis of confidence in the financial system. Dalio estimates that the government will need to borrow $12 trillion in new bonds to cover the budget deficit and service the current national debt. In such a situation, he recommends holding 10-15% of a portfolio in gold or bitcoin: "We will see non-fiat currencies become more important as a means of accumulating wealth and money".

Jeffrey Gundlach, who is called "the king of bonds" on Wall Street, has an even tougher stance. He believes that in the context of growing U.S. government debt and a weakening dollar, it is reasonable to hold up to a quarter of the portfolio in gold, which is two to three times higher than the classic recommendations of banks. "In this environment, 25% is not excessive," he told CNBC.

Paul Tudor Jones, the legendary macro trader who predicted and capitalized on the 1987 stock market crash, has a similar view. Today, he prefers to combine gold, bitcoin and stocks in his portfolio. In his words, it's "the best combination against inflation." Despite cutting the position by a third, Jones still had $65.6 million in the SPDR Gold Shares ETF in his portfolio at the end of June.

For Greenlight Capital hedge fund manager David Einhorn, gold has become not only insurance, but also the main source of returns in 2025. In the first quarter, his fund rose by 8.2%, while the S&P 500 index fell by 4.3%. It was the bet on gold that provided the advantage. In an interview with CNBC, Einhorn said: "Gold is not about inflation, it's about confidence in monetary and fiscal policy." Last year, the investor said that he recoups gold, including in the form of bullion.

Not all legendary investors share the gold rush. The main critic is Warren Buffett. He has repeatedly emphasized that gold "produces nothing and just lies around." In 2020, amid the coronavirus pandemic, Berkshire Hathaway unexpectedly invested in the gold mining company Barrick Gold, but six months later withdrew from the position. For Buffett, such assets are "capitalization of fear," while he himself bets on businesses that can make a profit and grow. His long-time partner, the late Charlie Munger, was even harsher: "Civilized people do not buy gold, they invest in business. He saw exceptions only in extreme situations - for example, "for a Jewish family in Vienna in 1939".

Michael Saylor, founder of Strategy and one of the most famous "bitcoin maximalists", sees gold as not just useless, but an obsolete asset. He states, "Bitcoin will surpass gold by a factor of 10 in market capitalization." According to Saylor, gold does not have the flexibility and "programmability" that digital currencies have, so in the future bitcoin will be the main instrument of savings.

A more moderate position is taken by Peter Lynch, the legendary Magellan fund manager in the 1980s. He allows gold in the portfolio at a level of about 5% as a hedge against inflation, but is skeptical of the metal itself. Lynch prefers gold mining stocks, which provide additional "leverage" to the metal's price and the opportunity to maximize returns through the operating results of the business.

Investment banks one after another raise gold forecasts: most of them expect further growth. Citigroup back in August predicted a price per ounce of $3500 within three months, but the market passed this mark faster than expected. UBS remains cautious: only $3900 by mid-2026. Goldman Sachs is talking about $4000 per ounce by mid-2026, but specifies that with a massive capital flight from Treasuries, the price could rise to $5000 per ounce.

Banks remain more restrained in their recommendations than individual investors. UBS advises to keep 5-7% of the portfolio in gold, emphasizing its role as a diversification tool, rather than betting on aggressive growth. Morgan Stanley suggests a "60/20/20" diversification model, where 20% is held together in gold and commodities. According to analysts' calculations, such structure makes the portfolio more resistant to "policy shocks" - from unexpected steps of the Fed to geopolitical crises.

Gold this year is on track for its strongest annual rise since the late 1970s, when, amid a double-dip recession and inflationary shock, gold surged above $800 an ounce for the first time and cemented its status as a major protective asset. The rally began in March 2025, when the Fed first signaled an imminent policy reversal. Since then, quotations have been going up almost without a break, and new reasons for uncertainty only strengthen this trend. The main ones are the 11% drop in the dollar index over the year, discussions about the government shutdown in Washington and the record growth of the national debt. Monetary policy provides additional stimulus: the market is waiting for a rate cut already in October and December, and this is a key factor for gold. As a non-interest earning asset, the metal wins precisely when the cost of money falls.

Institutional demand also plays its role. According to the World Gold Council, since 2022 central banks have been buying 900-1000 tons of metal annually - record volumes in the history of observations. Institutional demand also plays a role. Their goal is to diversify reserves and reduce dependence on the dollar amid geopolitical tensions. The main buyers are central banks of developing countries - China, India, Turkey and the Middle East: in 2025, they accounted for more than 70% of net purchases.

This article was AI-translated and verified by a human editor