Jakarta. Gold surged past $4,000 an ounce for the first time this week, hitting a record high that rattled financial markets and sparked warnings from Wall Street that global trust in the US dollar is fading.

Bridgewater Associates founder Ray Dalio said investors should consider allocating as much as 15 percent of their portfolios to gold, calling the metal an “excellent diversifier” amid mounting sovereign debt, persistent inflation, and waning trust in fiat currencies.

“It’s very much like the early ’70s,” Dalio said Tuesday at the Greenwich Economic Forum in Connecticut. “When there’s such a supply of debt and debt instruments, it’s not an effective storehold of wealth.”

Gold’s meteoric rise, up more than 50 percent this year, has coincided with a steep 10 percent depreciation in the dollar, the sharpest six-month drop in half a century, Citadel CEO Ken Griffin said at the Citadel Future of Global Markets Conference in New York.

He warned that the shift reflects “substantial asset inflation away from the dollar” as investors and central banks alike search for alternatives to US sovereign risk.

“Gold is now viewed as a safe harbor asset in a way the dollar used to be,” Griffin said. “That’s what’s really concerning.”

The surge in gold has been fueled by a combination of macroeconomic and geopolitical pressures. Persistent uncertainty over global conflicts, expectations of US Federal Reserve rate cuts, and robust central bank purchases have all supported bullion demand.

According to the World Gold Council, prices rose 26 percent in dollar terms in the first half of 2025, driven by diversification away from the greenback after Western sanctions froze nearly half of Russia’s foreign reserves in 2022. Central banks have bought more than 1,000 tons of gold annually since 2022, double pre-war levels, with purchases projected at 900 tons this year, according to consultancy Metals Focus.

The ripple effects are being felt in Indonesia, where state miner Aneka Tambang (Antam) has imported about 30 tons of gold from Singapore and Australia this year to meet soaring domestic demand, highlighting the nation’s growing dependence on overseas supply. Antam’s only active mine in Pongkor, West Java, produces just one ton annually, well below its 2024 sales of 43 tons.

Spot prices in Jakarta hit a new record of Rp2.296 million per gram on Wednesday, up Rp12,000 from the previous day. 

Jewelry-maker Hartadinata Abadi (HRTA) expects gold prices to climb even higher if the U.S. Federal Reserve and Bank Indonesia proceed with interest rate cuts. “Global monetary policies, weakening currencies, and strong central bank buying remain the main catalysts,” said HRTA Investor Relations Director Thendra Crisnanda in Jakarta on Monday. “Domestically, the weaker rupiah has strengthened gold’s role as a hedge asset, and we see solid growth momentum through the end of the year.”

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