"New Bond King" Gundlach: The dollar enters a long-term depreciation cycle and will continue to bet on gold and physical assets

The "new bond king," Jeffrey Gundlach, CEO of DoubleLine Capital, advises investors to stick to bets on precious metals and a weak dollar, believing this theme will continue to be effective in the future. He stated that the dollar will face structural weakness, and even a weak economy will struggle to change this trend, as long-term debt concerns and repayment pressures will continue to weigh on the dollar.

In an interview with CNBC on Wednesday, Gundlach mentioned that his portfolio has performed well over the past two years, primarily due to the themes of a weakening dollar, strengthening precious metals, and foreign markets outperforming. He recommends that investors allocate 30% to 40% of their stock portfolio to non-dollar markets and expects this strategy to continue yielding returns.

The "new bond king" also pointed out that the calls for interest rate cuts from President Trump and Treasury Secretary Bessent will only further depress the dollar and translate into inflationary policies. The ICE Dollar Index fell to a four-year low earlier this week, down 2% this year and over 10% in the past year.

Meanwhile, gold and silver broke through new highs of $5,500 and $118 per ounce, respectively, on Thursday.

Structural Weakness of the Dollar as a Core Theme

Gundlach stated that he positioned his portfolio around the core idea of a structural weakening of the dollar about two years ago. "Even if the economy weakens, the dollar will be weak because it will raise concerns about long-term debt. As repayment issues emerge, we will continue to see the dollar weaken," he said.

Emerging market stocks and bonds have performed particularly well. Gundlach noted that these indices not only outperformed the market but also provided currency conversion gains for dollar-denominated investors when the dollar weakens. He recommends allocating 30% to 40% of stock portfolios to non-dollar markets, although he does not suggest going as high as 70%, but expects this to continue to be a successful trade.

Federal Reserve Policy Outlook and Inflationary Pressures

After the Federal Reserve maintained interest rates, Gundlach stated he would "bet heavily" that investors will not see interest rate cuts during Chairman Powell's term. Powell's term will end in May, and he has kept rates stable citing economic improvement.

Gundlach believes that Powell deliberately emphasizes that inflation is slightly rising but not as serious as previously feared, and the unemployment rate is no longer rising in any meaningful way, supported by the fact that job growth is minimal but labor force growth is also limited. He pointed out that the calls for interest rate cuts from Trump and Treasury Secretary Scott Bessent will only further depress the dollar and translate into inflationary policies.

Physical Assets Over Speculative Concepts

Gundlach increased his holdings in gold mining stocks and land with personal funds in June 2025, calling this timing "very fortunate." He emphasized that physical assets remain key to protecting investors from currency fluctuations Gold has risen 90% in the past 12 months, while Bitcoin has weakened, and this comparison is significant. "I think this is related to the fact that those opaque private markets seem to be getting into more and more trouble. Investors are starting to look for something real; they are more interested in physical assets and are becoming more clear-headed about speculative concepts. I believe this will be an accelerating trend, and it is already underway," Gundlach said