Dubai: Why gold remains safest bet in uncertain times? Ray Dalio explains

Billionaire investor Ray Dalio says gold continues to be the safest store of wealth in today’s uncertain global environment, despite sharp price swings, as governments and investors grapple with rising debt, geopolitical tensions and volatile markets.

Speaking at the World Government Summit in Dubai, Dalio, founder of Bridgewater Associates – the world’s largest hedge fund – said confidence in traditional forms of money is being increasingly questioned, prompting central banks and sovereign investors to accumulate gold.

“Money is supposed to be both a medium of exchange and a storehold of wealth, and right now there's a questioning of how it will be a storehold of wealth,” Dalio said.

He noted that since the collapse of the gold-backed monetary system in 1971, governments have relied on fiat currencies that can be printed more easily, leading to a steady build-up of debt across economies. While this system has supported growth, it has also increased long-term financial risks.
In times of heightened uncertainty, Dalio said, gold stands apart because it cannot be easily controlled or devalued by any single country. Today, it is the second-largest reserve asset held by central banks globally, after the US dollar.

Volatility doesn’t weaken gold

Addressing gold’s recent volatility, Dalio warned against viewing it as a short-term trade. Gold prices have surged over the past year but have also seen sharp pullbacks, reflecting broader market uncertainty.

“Gold is up about 65 per cent from a year ago, and down about 16 per cent from its high, and I think people make the mistake of thinking: ‘Is it going to go up and down, and should I buy it?’ Individuals… perhaps central banks or governments or sovereign wealth funds should say: ‘What percentage of my portfolio should I have in gold?’.”

‘Effective diversifier’

Dalio described gold as an “effective diversifier” – an asset that tends to perform well during periods of crisis and instability, even if it lags during more prosperous times. Maintaining a consistent allocation, he said, allows investors to manage risk rather than chase returns.

“The most important thing is to be well diversified,” Dalio said, adding that strategic asset allocation remains the foundation of long-term financial resilience.