Gold ETFs Continue to Soar: How Much Should You Invest?

Core Insights - The year 2025 has seen a significant gold rally, with the SPDR Gold Trust (GLD) up 51.7% year-to-date and over 11% in the past month, while the S&P 500 is up 15% this year and 3.7% in the last month [1][2] Investment Trends - Investors are increasingly turning to gold as a safe-haven asset amid global instability, geopolitical tensions, and the potential for Federal Reserve rate cuts, further fueled by the current U.S. government shutdown [2] - Ray Dalio, founder of Bridgewater Associates, recommends a 15% allocation to gold in investment portfolios, emphasizing its role as a hedge against monetary debasement and geopolitical uncertainty [3][4] - Jeffrey Gundlach, CEO of DoubleLine Capital, suggests an even higher allocation of up to 25% due to inflationary pressures and a weaker dollar [4] Historical Context - Dalio draws parallels between the current market environment and the early 1970s, characterized by high inflation, government spending, and growing debt, which undermined confidence in paper assets [5] Central Bank Activity - A notable driver of gold demand is the increasing purchases by central banks, particularly from BRICS nations and emerging economies, as they seek to diversify away from the U.S. dollar [6] - In August, central banks added a net 19 tons to global gold reserves, with China's central bank continuing its buying streak for the 11th consecutive month in September [7] Price Forecasts - Goldman Sachs has raised its gold price forecast for December 2026 to $4,900 per ounce, citing inflows from Western ETFs and anticipated further central bank purchases [7] - Market expert Ed Yardeni predicts that gold could reach $10,000 an ounce by 2030, representing a potential increase of about 151% over the next five years, driven by various economic factors [8]