Dalio says gold remains the safest investment choice

Ray Dalio, founder of the world’s largest hedge fund Bridgewater, said at the “World Government Summit” in Dubai on Wednesday that he is not concerned about the recent sharp drop in gold prices and still believes gold remains the safest investment choice.

Dalio pointed out that central banks around the world continue to hold large reserves of gold. Last year, the scale of gold reserves surpassed that of the euro, making it the second largest reserve asset.

Dalio stated: “I think if those responsible for making policy could speak frankly, they would say that in this environment, gold is the safest investment choice.”

Dalio added that gold’s safety “does not change from day to day.” He was referring to gold’s long-standing role as a hedge against inflation and as a substitute for fiat currency.

“People often ask, ‘Will gold go up or down, should I buy?’ I think that’s the wrong way to look at it,” Dalio said, suggesting that a better question for investors is what proportion of their total portfolio should be allocated to gold.

Last week, gold and other metals fell sharply as investors focused on Trump’s nomination of Kevin Warsh for Federal Reserve Chair. Investors quickly adjusted their expectations for interest rates and the US dollar, leading to rapid liquidation of their metal positions.

Over the past year, gold’s appeal has also been partly driven by economic risks, such as concerns that US debt levels may rise to unsustainable levels or that the US dollar may weaken along with other fiat currencies.

Dalio has frequently warned the market about such risks. He said he still believes the US is on the “edge” of a capital war, and that geopolitical tensions are making global investors reluctant to lend money to the US by buying US bonds.

“Gold is a diversification tool. In other words, it performs especially well when the economy is in trouble,” Dalio said. “What I want to say is that the most important thing is to have a diversified portfolio.”

Dalio is known for advocating gold investments. In the past, he has suggested that investors allocate 15% of their portfolio to gold and bitcoin, citing concerns about currency devaluation.

Editor: Yu Jian SF069