Will Gold Cross $5,000 in 2026? What Hedge Fund Titan Ray Dalio Says About Your Portfolio

Why Gold Is Having Its Moment

The yellow metal has surged 67% in 2025—far outpacing its historical average annual return of 7.96% over three decades. This explosive rally reflects what’s happening in the real economy: investors are racing to gold as a hedge against inflation, geopolitical tensions, and fiscal instability.

It’s not hard to see why. Throughout history, gold has held its status as the ultimate store of value across governments, central banks, and institutional portfolios worldwide. The reason is simple: scarcity. Only 216,265 tons of gold have been extracted in human history, compared to billions of tons of other commodities. Once it’s gone, there’s no making more.

That immutability is precisely why it matters in an era of exploding money supply. Before 1971, the U.S. operated under the gold standard, which tethered the dollar to physical metal reserves and limited how much currency could be printed. Since abandoning that system, the U.S. has watched money supply expand dramatically—resulting in a stunning 90% erosion in the purchasing power of the U.S. dollar.

The Fiscal Backdrop That’s Driving Gold Higher

The numbers tell a stark story. The U.S. national debt just hit $38.5 trillion, with a $1.8 trillion budget deficit during fiscal year 2025 alone. Faced with mounting obligations and seemingly lacking political will to cut spending, policymakers appear to have only one lever left: devalue the currency by pumping out more money.

That’s where gold enters the picture. Investors know that rampant money printing historically fuels inflation, which erodes purchasing power—and gold is the classical antidote. The correlation is unmistakable: as money supply has expanded over recent decades, gold prices have climbed, even as the dollar has weakened.

Ray Dalio’s Unconventional Allocation Call

Conventional wisdom suggests capping gold at roughly 5% of a portfolio, given that it typically underperforms earnings-generating assets like stocks. But Ray Dalio, founder of Bridgewater Associates and a renowned observer of historical patterns, has a different take. Speaking at the Greenwich Economic Forum, Dalio recommended boosting gold allocations to as much as 15%—a notably elevated threshold compared to standard advice.

His reasoning draws from history. Dalio has long cautioned about the consequences of reckless fiscal policy, and he sees parallels to the 1970s—an era when spiraling inflation, government spending, and mounting debt shattered confidence in paper currencies. Given today’s similar conditions, his advice deserves serious consideration.

The $5,000 Target and What It Means for Investors

Gold is currently trading at $4,400 per ounce, already at all-time highs. If the metal continues its momentum and crosses $5,000 during 2026, investors who accumulate positions now could realize nearly 14% gains.

Such an outcome isn’t implausible. The Consumer Price Index remains stubbornly elevated, and with trillion-dollar deficits projected to persist, the macroeconomic environment continues favoring precious metals. The conditions that drove gold’s extraordinary 67% rally in 2025 show no sign of reversing.

Getting Exposure: The Practical Path

While buying physical gold offers direct ownership, it introduces complications: storage fees, insurance costs, and liquidity challenges when you need to sell quickly. That’s where exchange-traded funds (ETFs) shine.

The SPDR Gold Trust (GLD) is among the largest, managing $146 billion in fully gold-backed assets. It offers instant liquidity—buy or sell with a mouse click—without the hassle of storing bullion. The 0.4% annual expense ratio works out to just $40 per year on a $10,000 investment, which typically costs less than insuring and storing physical metal over the long haul.

For the average investor, GLD represents the most accessible way to gain gold exposure and benefit from potential upside as the metal works toward that $5,000 threshold in 2026.

The Takeaway

Ray Dalio’s suggestion to meaningfully increase gold weighting might appear aggressive relative to traditional 5% allocations, but in an environment marked by fiscal excess and monetary expansion, it warrants genuine reflection. Should gold cross $5,000 next year as the current trajectory suggests, today’s entry points could prove remarkably attractive.