MW Why investors should put 10% of their money in gold, says this strategist

By Jules Rimmer

Tanglewood strategist says investment case for precious metal remains intact

During periods of geopolitical tumult, one might have expected gold to outperform, but that hasn't been the case in the Iran war so far.

Despite gold's recent foray into bear market territory, the macro case for buying the commodity remains solid, according to a strategist for a $1.5 billion Houston investment firm.

Gold's (GC00) plummeting price during the recent geopolitical turbulence "seems counterintuitive," Tom Bruce, macro-investment strategist at Tanglewood Total Wealth Management, told MarketWatch in an interview on Thursday.

"This is a month in which one would have expected it to perform," he said, in reference to the Iran conflict that began late last month, precisely the kind of event against which gold was meant to insure investors.

Instead, the precious metal has fallen 15% in the past month and is down 21% from its intraday peak on January 28. Typically, a 20% drop is considered the definition of a bear market.

Amid the March madness, however, Bruce is among those asset managers who do not see any change in the fundamental investment case for gold and are holding the line with their endorsement of it as a core component of portfolios.

Tom Bruce, macro-investment strategist at Tanglewood Total Wealth Management, thinks 10% is a decent weighting for gold in a balanced portfolio

In recent years, the registered investment adviser Tanglewood Total Wealth Management has been gradually upping its recommended portfolio weightings for gold.

"We increased gold in our recommended portfolio weighting from 4% to 10% by the end of 2024," said Bruce.

Come the end of the first quarter of 2026, after gold has more than doubled in that period, Tanglewood is still recommending that exposure.

The adviser tends to express its view on the precious metal by playing gold exchange-traded funds GLD rather than mining stocks GDX , for simplicity and easy liquidity.

What explains the sell-off in gold then, at a time when its safe-haven allure and inflation-fighting credentials should have been attracting buyers in theory?

Bruce thinks the explanation is multifaceted. First, he pointed to deleveraging that often takes place in an asset in which investors have ample profits, irrespective of its fundamental drivers. Second, the sudden risk-off move in markets when the U.S. and Israel opened hostilities led to a degrossing of trading books so longs (like gold) were sold and shorts, like the out-of-favor software stocks IGV, ended up rallying on some days, he said.

Finally, gold's fall can be partly attributed to the repricing of interest rate expectations now that bond traders no longer expect an Fed easing (FF00) in 2026, said Bruce. Falling interest rates are generally seen as positive for gold given it doesn't offer any yield itself.

In the universe of portfolio construction, a 60% weighting in stocks and 40% in bonds was long considered the classic, balanced approach. Therefore a chunky tenth of a fund in gold is quite an emphatic call, even if many funds have been raising their gold holdings in the last couple of years.

For the Tanglewood strategist, though, most of the planks in the investment rationale remain intact. The themes of the debasement trade, the store of value, central banks' accumulation and the diversification of reserves in the aftermath of the freezing of Russian assets in 2022 are all still applicable, he said.

The only previous driver of the gold price that may not be valid in light of recent events is the anticipation of dollar DXY weakness. Bruce pointed out that a flight to safety and higher interest rates may boost the U.S. currency's appeal, crimping the performance of gold.

Overall, however, with gold down a fifth from its Jan. 28 peak, much of the deleveraging taken place and the speculative froth eliminated from positioning, Bruce is comfortable with his sizable weighting in gold.

Read: Gold's tumble has created opportunities to buy these stocks at bargain prices

-Jules Rimmer

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March 27, 2026 05:59 ET (09:59 GMT)

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