How much gold should retirees have in their retirement portfolios?

With America’s budget deficit continuing to rise, it’s not just so-called “gold bugs” showing continued interest in the precious metal. Goldman Sachs recently urged investors to seek exposure to gold and oil as a hedge against inflation.

Billionaire investor Ray Dalio, chairman of Bridgewater Associates, has been warning for years that U.S. debt is unsustainable and has urged clients to be ready. His “all-weather” portfolio looks something like this:

• 30% equities
• 40% long-term U.S. Treasurys
• 15% intermediate Treasurys 
• 7.5% gold 
• 7.5% other commodities

But gold prices, now near their all-time high, tend to be volatile, so how much new exposure is prudent for retirees?

Inflation hedge

“Many people turn to gold and other commodities as a hedge against inflation,” Aaron Brask,  principal at Aaron Brask Capital, told Retirement Living. “However, gold itself is not a productive asset. That is, its value primarily depends on other people wanting to buy it down the road.”

That said, its value does tend to keep up with inflation and the diminished buying power of the dollar. While Brask said he doesn’t rule out gold, he does think it tracks well with stock price performance.

William London, partner at Kimura London & White, notes a significant increase in gold demand in 2025, especially among central banks. Gold, he says, can offer a measure of protection against inflation.

“While specific situations will differ, most financial advisors recommend holding between 5% and 10% of a retirement portfolio in gold,” London said. “For people with above-average risk aversion or more fears of inflation, an up to 15% allocation can be warranted.”

But too much gold, London said, can constrict both portfolio growth and liquidity, so “a policy that is centered in diversification and balance is essential.”

“Gold IRAs allow investors to own physical gold in a retirement portfolio with tax advantages, with the caveat of specific compliance requirements,” London said.

Gold mining stocks

Thomas Winmill, portfolio manager at Midas Funds, said his firm advocates buying stock in gold mining companies, whose prices have lagged the price of gold but has recently begun to rise.

“Seniors should allocate to gold a percentage of their overall wealth and adjust the amount in proportion to changes in their wealth – in the way insurance should be adjusted to reflect the value of the insured item,” he said. So, seniors might increase gold ‘insurance’ as their wealth increases.”

Winmill said buying physical gold carries its share of expenses, such as storage costs and insurance, noting there are other ways to gain exposure to gold in a portfolio. 

Before making any move, however, it’s important to discuss it with an objective and trusted financial advisor – especially in this economic climate.