Paul Tudor Jones is a Wall Street legend who has actively managed his hedge fund, Tudor Investment Corporation, for the last 46 years. His investment strategy is asset agnostic, and he's known for making money in everything from stocks to foreign exchange to cryptocurrencies.
Tudor manages over $83 billion in assets, and its most recent 13F filing (for the quarter ended Sept. 30) with the Securities and Exchange Commission (SEC) revealed some interesting moves. Tudor Jones and his team trimmed the fund's holdings in tech powerhouses like Apple and Alphabet while increasing its position in the SPDR Gold ETF (GLD 0.61%) by a whopping 49%.
The exchange-traded fund (ETF) soared by 64% last year, and it's already up over 20% in 2026 as investors pile into gold to hedge against rising political and economic uncertainty. The shiny metal just crossed $5,000 per ounce for the first time in history, and here's why it could go even higher from here.
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The perfect environment for precious metals
Gold has been a widely recognized store of value for thousands of years primarily because of its immense scarcity. Only 216,265 tons of the yellow metal have been mined throughout human history compared to roughly 1.7 million tons of silver and billions of tons of other commodities like coal and iron ore.
Gold isn't very useful in industrial settings, mainly because of its prohibitively high price. Instead, most of its demand comes from investors who use it as a hedge against the depreciation of paper currencies. Until 1971, the U.S. used the gold standard, which prevented the government from printing additional money unless it had an equal amount of physical gold reserves to match. This kept a lid on inflation and gave citizens confidence in the value of their money.
After the U.S. abandoned this mechanism five decades ago, money supply exploded, and the U.S. dollar has subsequently lost around 90% of its purchasing power. Therefore, while gold isn't in high demand for industrial purposes, it has exploded in value in dollar terms mainly because of the currency's persistent decline.
Gold Price in US Dollars data by YCharts.
In an interview with Fortune in October 2024, Tudor Jones recommended investors buy gold because the U.S. was on an unsustainable fiscal path. Sure enough, the government ran an enormous budget deficit of $1.8 trillion during fiscal 2025 (ended Sept. 30), which ballooned the national debt to a record high of $38.5 trillion.
Tudor Jones noted that throughout history, civilizations have always "inflated away their debts" by printing more money, which is a tailwind for hard assets. Based on gold's incredible 64% gain last year, it appears investors are increasingly worried he might be right.
NYSEMKT: GLD
Key Data Points
There is room for more upside in 2026
The U.S. government is on track for another trillion-dollar budget deficit in fiscal 2026, so the conditions that sent gold soaring in 2025 are likely to persist this year. But before investors race off to buy the shiny yellow metal, it's important to remember that annual returns of over 60% aren't the norm. In fact, it gained an average of 8% annually over the last 30 years, underperforming the S&P 500 stock market index, which climbed by 10.7% per year.
Sharp spikes in the price of gold have often been followed by lengthy periods of consolidation. For example, it delivered practically no return in the decade between 2011 and 2020, while the stock market more than doubled over the same period.
That doesn't mean investors should avoid gold, especially since billionaires like Paul Tudor Jones were still buying as recently as a few months ago. But history suggests returns could be more modest going forward, so it might be a good idea to keep your position sizing small and favor income-producing assets like stocks instead.
The SPDR Gold ETF is a great alternative to buying physical metal because it doesn't require storage or insurance, which costs money, and it's also much easier to sell in a pinch. The fund is fully backed by $172 billion in physical reserves, so investors can be confident in its ability to accurately track the price of gold.
The ETF isn't free to own, though, because it has an expense ratio of 0.4%, which is the proportion of the fund deducted each year to cover management costs. That means an investment of $10,000 will incur an annual fee of $40, but that is probably still cheaper than storing and insuring $10,000 worth of physical metal.
