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Gundlach Urges Shift to Bonds, Gold, and Commodities

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  Published in Stocks and Investing on Thursday, January 29th 2026 at 11:46 GMT by Business Insider
      Locales: UNITED STATES, CHINA, JAPAN

Los Angeles, CA - January 29th, 2026 - Jeffrey Gundlach, the renowned "bond king" and CEO of DoubleLine Capital, has issued a compelling investment outlook, advocating for a strategic shift towards bonds, gold, and select commodities. In a recent webcast, Gundlach outlined a scenario where cooling inflation, a potentially softening US dollar, and ongoing supply chain vulnerabilities will drive performance across these asset classes, while cautioning against the risks inherent in inflated stock valuations.

Gundlach's core thesis revolves around the anticipated end of the Federal Reserve's tightening cycle. After a sustained period of interest rate hikes aimed at curbing inflation, he believes the central bank is nearing a pivot. This anticipated shift is the cornerstone of his bond strategy: favoring short-term bonds over longer-dated ones. "We're at the end of the hiking cycle. It's time to be in short-term bonds," Gundlach stated, explaining that while a rate cut is likely, longer-term bonds remain vulnerable should economic conditions force the Fed to reverse course again. He specifically pointed to the potential for a significant decline in the 10-year Treasury yield, suggesting an opportune moment for investors to lock in gains.

Beyond fixed income, Gundlach strongly recommends a position in gold. The precious metal has long been considered a safe-haven asset, and Gundlach sees its appeal amplified by the current economic climate. "Gold is a pretty good place to be," he emphasized, citing its historical track record as a reliable hedge against both inflation and a weakening dollar. With inflationary pressures, although moderating, remaining a concern, and potential downside risks to the dollar's strength, gold offers a tangible store of value. Furthermore, geopolitical instability, a constant undercurrent in the global economy, further supports the case for gold as a portfolio diversifier.

Commodities also feature prominently in Gundlach's investment recommendations. He anticipates continued price increases fueled by persistent supply shortages and the lingering effects of inflation. These shortages, stemming from a combination of logistical bottlenecks, geopolitical disruptions, and underinvestment in production capacity, are expected to create upward pressure on prices across a range of commodities. While he didn't specify particular commodities, the implication is that investors should consider broadening their exposure to this asset class as a means of protecting against inflation's erosion of purchasing power.

However, Gundlach isn't advocating for a wholesale shift away from equities. Instead, he is urging caution and selectivity. He specifically warned against the inflated valuations in certain sectors, particularly "meme stocks" and the highly hyped artificial intelligence (AI) space. He characterized these areas as susceptible to speculative bubbles, vulnerable to sharp corrections when market sentiment shifts. "There's a lot of hype around AI. Be careful," he cautioned, highlighting the disconnect between current valuations and underlying fundamentals in some companies. He believes a more disciplined approach to stock investing, focusing on companies with solid earnings and sustainable growth, is crucial in the current environment.

Central to Gundlach's outlook is a view that the US dollar's exceptional strength may be waning. While remaining a global reserve currency, the dollar faces headwinds from factors such as the growing US national debt, rising trade deficits, and the potential for other currencies to gain ground. A weaker dollar would, in turn, further enhance the attractiveness of assets like gold and commodities, which are often priced in US dollars. It would also provide a boost to US exports.

In essence, Gundlach's message is one of cautious optimism and strategic repositioning. He is not predicting a market crash, but rather a shift in leadership, with investors rewarding assets that offer genuine protection against inflation, currency risk, and speculative excess. His insights, shaped by decades of experience in the bond market, provide a valuable framework for navigating the complexities of the current economic landscape.