DoubleLine Capital CEO Jeffrey Gundlach has expressed an increasingly bullish outlook on gold, recommending that investors could allocate as much as 25% of their portfolios to the precious metal. This guidance significantly exceeds conventional portfolio recommendations for commodities. Gundlach, whose firm manages approximately $95 billion as of the end of 2024, believes that gold’s appeal will only strengthen in the face of persistent inflation and a weakening U.S. dollar.
In a recent interview on CNBC’s “Closing Bell,” Gundlach stated, “I think almost certainly gold will close above $4,000 before the end of this year,” predicting a 7% rise from its current record levels. He views a 25% allocation in gold as not only reasonable but as a critical insurance policy in this economic landscape. Gundlach reasons that, as the dollar depreciates, gold becomes increasingly attractive to investors holding other currencies, while rising inflation enhances the metal’s status as a haven for value retention.
Interest rates further influence gold’s dynamism; as rates decline, the opportunity cost of holding an asset that does not yield interest diminishes. Gundlach’s prediction regarding the sustained elevation of inflation is also contingent upon various factors, including tariff impacts. He commented on the uncertainty surrounding the inflationary outlook, acknowledging that even the Federal Reserve’s Chair Jerome Powell has expressed uncertainty about when and how tariff effects will manifest.
The rally in gold prices has also reached new heights, with the bullion achieving an intraday all-time high of $3,744 following the Fed’s first interest rate cut of the year, coupled with indications of ongoing easing measures. In 2024 alone, gold has surged by more than 40%. Gundlach noted that the rise in gold prices extends to gold mining stocks, signaling that retail investors are increasingly participating in the gold market’s momentum.
This surge in investment interest reflects a broader recognition of gold’s advantages amid current economic conditions, reinforcing Gundlach’s stance that gold is not only a prudent investment but also a necessary component of a modern investment strategy.
