Bridgewater Associates founder Ray Dalio stated on Friday that gold has started replacing some U.S. Treasury holdings as the riskless asset for investors, amid a continued surge in the yellow metal's prices.

Answering questions by users on X, Dalio called gold“the most sound fundamental investment,” adding that it is a very effective diversifier to other asset classes like debt and equity.

“A factual answer to your question is yes gold has begun to replace some US Treasury holdings as the riskless asset in many portfolios, most importantly in central banks and large institutional portfolios,” he said, adding that the holders of these portfolios have reduced their U.S. Treasury holdings relative to their gold holdings.

“Gold is the most well-established currency-in fact it is now the second largest held by central banks-and has proven to be much less risky than all government's debt assets,” Dalio added.

The billionaire hedge fund manager's comments on gold come at a time when the yellow metal has been on a record-breaking spree. Spot gold prices have surged 15% over the past month, and more than 56% over the past year. The gold rally is not expected to end anytime soon, either.

Dalio pointed to central banks printing money when they had“too much debt” to repay, thereby devaluing it.“History shows us that the biggest risk is that debt assets like U.S. Treasuries will either be defaulted on or devalued, more likely devalued,” he added, stating that historically, around 80% of all currencies have disappointed, while 20% have been“severely devalued.”

Earlier on Friday, analysts at HSBC projected gold prices to rise to $5,000 an ounce by 2026 on rising risks, according to a Reuters report.“Gold rally likely sustained through 1H'26 by geopolitical risks, economic policy uncertainty and rising public debt,” the firm stated in a recent note, adding that it expects central bank demand for gold to remain high.

Following a nearly 5% surge over the past five trading sessions, the SPDR Gold Shares ETF (GLD) was down 2.54% at the time of writing, while the iShares Gold Trust ETF (IAU) declined 2.58%. Retail sentiment on Stocktwits around the GLD ETF was trending in the 'extremely bullish' territory at the time of writing.

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