🏆 Dalio Just Went All-In: "15% in Gold" (Plus: Why Utilities Are the New Tech)

Markets are working to stabilize after Tuesday's pullback that snapped the S&P 500's 7-day winning streak

Author

Jason Paloma
October 08, 2025 • Estimated Reading Time: 11 minutes

😎 Today's Market Vibes

Markets are working to stabilize after Tuesday's pullback that snapped the S&P 500's 7-day winning streak. As of Tuesday's close, the S&P 500 stood at 6,714.59, while defensive sectors like utilities continue showing strength amid elevated uncertainty.

🔑 Key Indices (as of Tuesday October 7 close):

  • S&P 500: 6,714.59 (-0.38% Tuesday, snapping 7-day win streak)

  • Dow: Modest gains on defensive rotation

  • Nasdaq: Tech stabilizing after Tuesday's -0.67% drop

  • VIX: Hovering near 16 despite elevated uncertainty

🔥 Commodities on Fire:

  • Gold: ~$4,034-4,051/oz (up over 50% year-over-year)

  • Bitcoin: Holding above $127,000 after Monday's surge

🔥 Today's Major Themes

Ray Dalio Raises the Stakes: 15% Gold Allocation

In a bombshell statement at Tuesday's Greenwich Economic Forum, Bridgewater founder Ray Dalio doubled down on his gold thesis, now recommending investors allocate 15% of portfolios to gold - up from his previous 10-15% range.

His reasoning: "It's like the early 1970s" - an environment of high government debt, currency debasement, and geopolitical uncertainty.

His quote: "Gold is the only asset that somebody can hold and you don't have to depend on somebody else to pay you money for."

Dalio's 15% allocation discussion aligns with research on high-yield gold funds mentioned in the materials, which reference funds delivering up to 64% annual distributions. With gold crossing $4,000 and recording 39 straight new highs in 2025, these income-focused approaches represent one way market participants are positioning around this trend.

With the Buffett Indicator at 209% - its highest reading in financial history - the research materials point to Buffett's $325 billion cash position and suggest a potential rotation into gold and gold miners. The materials identify four "Golden Anomaly" stocks trading at discounts to historical norms. Dalio's 15% discussion appears to validate themes explored in this research.

⚡ Utilities: The Stealth Bull Market

Through Tuesday's close, utility stocks have been hitting all-time highs, with the Utilities Select Sector SPDR (XLU) showing an RSI of 76 - technically overbought territory. The sector has gained 8.9% over the past month.

Leading gainers recently:

  • American Electric Power (AEP): Recent +2%+ gains

  • Exelon (EXC): Recent +2%+ gains

  • American Water Works (AWK): Recent +2%+ gains

  • Constellation Energy (CEG): +19% over the past month

Dylan Jovine's research highlighted AI's energy demands, identifying a Texas-based energy firm trading under $20. The materials reference Elon Musk's comments about civilization and energy infrastructure. With utilities up 8.9% in just one month, the AI energy thesis discussed in various research pieces has moved from theoretical to observable in market pricing.
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These research materials discuss Trump's resource control strategy in the context of securing America's energy infrastructure for the AI race. The materials explore how traditional tech investors may be reassessing the importance of reliable electricity infrastructure. Energy infrastructure is emerging as a critical component of the AI buildout.

📉 The Oracle Warning: AI Profitability in Question

Tuesday's selloff was triggered by reports that Oracle's cloud computing margins are far lower than analysts estimated, with the company losing money on some AI infrastructure deals.

Market reaction:

  • Oracle: -3% Tuesday

  • Tech sector led market decline

  • Questions emerging about AI return on investment

Eric Fry's research thesis explored how infrastructure providers face margin pressure from capital expenditures. The materials suggested that while many focused on AI chips, infrastructure enablers present different economics. This perspective offers an alternative view to the consensus AI narrative, particularly relevant given Oracle's recent margin disclosures.

🏛️ Government Shutdown: Day 8

The federal funding impasse continues into its eighth day with no resolution in sight. Prediction markets on Kalshi suggest an 11-day duration, pointing to October 15 as the most likely end date.

Market impact:

  • Economic data visibility severely limited

  • Fed speakers operating without current data

  • Historically, markets have weathered shutdowns well

  • Dollar Index strengthening to 98+

The paradox: Markets keep climbing despite the dysfunction, but Jefferies warns that "the ongoing shutdown increases the level of uncertainty" and leaves less room for error if data deviates from the "Goldilocks" narrative.

💰 The Debt Crisis Backdrop

Ray Dalio's warning isn't happening in a vacuum. The Congressional Budget Office projects interest payments on federal debt could hit $13.8 trillion over the next decade.

The debt-to-revenue ratio indicator discussed in the materials has historical precedent before major market events in 2000, 2008, and 2020. The materials note this signal has appeared again. This provides context for Dalio's comments about the debt environment and may be relevant for those analyzing current market conditions relative to historical patterns.

🎯 Strategic Plays in Today's Market

Gold: The Trade of 2025

With 39 new all-time highs already this year and a gain exceeding 50%, gold continues its historic run. Central banks are projected to buy 900 tonnes in 2025, representing a structural shift in reserve asset allocation patterns.

J.P. Morgan targets:

  • Q4 2025: $3,675/oz average

  • Mid-2026: $4,000/oz

This research materials discuss China's role in the global gold market and reference high-yield funds with distributions. The materials frame this as part of a restructuring of global reserve asset preferences, providing context beyond just Western central bank activity.

🚗 Tesla: The Volatility Machine

Tesla introduced new versions of its top-selling models priced under $40,000 on Tuesday, but the stock sank 4% as traders took profits after the recent rally.

Upcoming catalyst: Q3 earnings on October 22

These research materials describe a systematic 3:30 PM trading approach that focuses on repeatable price action patterns. With Tesla's earnings approaching in two weeks and volatility likely increasing, the materials present this as a structured methodology that doesn't rely on directional predictions or news interpretation.
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🤖 AMD vs. NVIDIA: The Infrastructure War Heats Up

Monday's AMD surge (+23.7% on the OpenAI deal) created the biggest divergence in the chip wars this year. But Tuesday's Oracle concerns weighed on both semiconductor giants.

The research materials discuss NVIDIA's volatility patterns on daily and 30-minute charts. The materials suggest that when macro headlines create broad selling pressure, pattern-based approaches may provide an alternative to prediction-based strategies. This represents one perspective on navigating semiconductor volatility.
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📊 The "Crack-Up Boom" Theory

Janney Montgomery Scott's Dan Wantrobski argues we're entering a "crack-up boom" - a liquidity-driven capital flight toward private sector assets that pushes multiple areas to new highs simultaneously in parabolic fashion.

His observation: "We still believe we are in, or are entering, such a phase in 2025."

The seasonality research referenced in the materials tracks historical patterns for specific stocks on particular October dates:

The materials present these as observable historical patterns. If Wantrobski's "melt-up" thesis proves correct, these seasonal tendencies could potentially align with broader momentum.

💡 Income in Uncertain Times

With Dalio's commentary on currency debasement and the S&P 500 up 35% from April lows, various research materials explore income-focused strategies alongside growth approaches.

The materials discuss Tim Plaehn's methodology for identifying monthly dividend payers with consistent growth histories. The research references stocks described as long-term holdings through market cycles. One example cited has doubled its dividend every six months for eight consecutive years. In scenarios involving currency debasement, these cash flow streams represent one perspective on wealth preservation.

The materials reference a 5-Day Options Income Blueprint teaching what's termed the "Lazy Trade" strategy - described as targeting weekly income with historically 80% success rates noted. The materials suggest that when market direction is uncertain but volatility persists, income approaches with defined risk parameters offer an alternative to directional positioning.

🎬 Bottom Line

Ray Dalio's discussion of a 15% gold allocation on Tuesday is generating attention, but the broader context includes multiple converging themes: AI's infrastructure demands correlating with utility stock strength, Oracle's margin disclosure adding complexity to AI profitability narratives, and an 8-day government shutdown creating uncertainty in traditional economic forecasting.

Gold crossing $4,000 alongside Dalio's commentary, utilities breaking out on AI power demand, and various systematic trading methodologies being discussed - these represent different angles on current market dynamics rather than a single unified narrative. The old assumptions about market relationships may be shifting.

The S&P 500 may be near records, but with the Buffett Indicator at 209%, Dalio comparing current conditions to the 1970s, and Oracle revealing AI economics may be more complex than initially understood, market participants are weighing multiple scenarios. Tuesday's modest pullback doesn't resolve these questions - it simply reflects ongoing price discovery as these dynamics play out.

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