Have you ever watched one of those legendary investors completely change their tune almost overnight and wondered what on earth they suddenly see that the rest of us are missing?
That’s exactly what happened to me this week when Jeffrey Gundlach, someone who’s been pretty cautious on almost everything outside of certain bonds for years, suddenly announced he’s turning positive on broad commodities and doubling down on non-US investments.
And the timing? Right after the Federal Reserve delivered its third rate cut of the year. Coincidence? Hardly.
The Bond King Sees a Major Shift Coming
For those who might not follow fixed-income circles religiously, Jeffrey Gundlach runs DoubleLine Capital, a firm that oversees roughly $95 billion, and he earned the nickname “Bond King” for good reason. When he speaks, professional investors listen.
This time his message was crystal clear: the environment has changed, and it’s time to rotate.
“Commodities broadly have quietly started to rise… For the first time in a long time, I turned positive on commodities broadly last week.”
– Jeffrey Gundlach, December 2025
That quote stopped me in my tracks. Gundlach isn’t the type to chase momentum. If he’s warming up to an asset class, there’s usually a deeper macro story behind it.
Why Commodities Suddenly Look Attractive
Let’s be honest, most of us stopped paying serious attention to broad commodity indices years ago. They spent the better part of a decade going sideways or down while tech stocks flew to the moon.
But something interesting has been happening under the radar. While everyone was obsessed with AI and the Magnificent Seven, a stealth rally in raw materials has been building.
Energy, metals, agriculture, you name it, many of these markets have been grinding higher without fanfare. And Gundlach believes this move has legs.
- Oil quietly reclaimed levels not seen since 2022
- Copper has been flirting with all-time highs on electrification demand
- Even soft commodities like coffee and cocoa have posted massive gains
- Gold, of course, has been the spotlight, but the whole complex is moving
In my experience, when an entire asset class starts moving together after years of dormancy, it’s rarely random noise. There’s usually a fundamental driver.
And Gundlach thinks he’s found it.
The Dollar Is About to Take a Beating
Here’s the core of his thesis, and honestly, it’s pretty compelling.
Gundlach expects the next Federal Reserve chair (appointed under the incoming administration) to be significantly more dovish than the current regime. Lower policy rates for longer, perhaps even returning to zero or negative real rates at some point.
When that happens, two things tend to occur:
- The yield curve steepens dramatically (short rates low, long rates higher on growth/inflation)
- The U.S. dollar resumes its long-term decline
A weaker dollar is rocket fuel for commodities priced in dollars. It’s also rocket fuel for anything not priced in dollars, i.e., pretty much everything outside the United States.
“You should be increasing investments in non-dollar assets. I think this is early innings for the outperformance of non-dollar investments relative to dollar investments.”
Early innings. Let that sink in. He’s not saying this rotation is played out. He’s saying it’s barely started.
Gold Still Belongs, But Don’t Stop There
Back in September, Gundlach recommended a whopping 25% portfolio allocation to gold. Then in late October he trimmed it a bit as prices surged. Classic discipline.
Now? He’s comfortable owning it again. But importantly, he’s expanding beyond just the yellow metal to the entire commodity spectrum.
Think of it this way: gold is the headline act, but the whole band is about to go on tour.
Personally, I’ve always viewed gold as portfolio insurance, something you own and hope you never need. But when someone of Gundlach’s caliber starts advocating for broad commodity exposure, it feels less like insurance and more like an offensive play.
Emerging Market Debt: The Sleeper Hit of 2025?
If there’s one area Gundlach seems particularly excited about, it’s emerging-market fixed income.
These bonds have already been among the best-performing fixed-income sectors in 2025, and he believes the party is far from over.
Why? Same story: weaker dollar + higher commodity prices = stronger economies and currencies in many developing nations.
Countries that export raw materials suddenly have wind at their backs. Their local currency debt becomes more attractive, and credit spreads can tighten meaningfully.
I’ve seen this movie before. During the 2000s commodity super-cycle, emerging-market debt crushed U.S. Treasuries and investment-grade corporates. History doesn’t repeat, but it often rhymes.
What This Means for Everyday Investors
Look, most of us aren’t running $95 billion. We don’t have teams of analysts and direct lines to policymakers.
But we can still take the same insights and apply them at our scale.
Here are some practical ways to position if you buy Gundlach’s thesis:
- Add a broad commodity ETF (something that includes energy, metals, and agriculture)
- Consider increasing exposure to international and emerging-market stocks or bonds
- Keep your core gold position (5-15% feels reasonable for most risk profiles)
- Look at currency-hedged vs unhedged foreign funds depending on your dollar view
- Revisit TIPS and other inflation-protected securities
Perhaps the most interesting part? Gundlach is making these changes from a position of strength. DoubleLine’s flagship funds have crushed their benchmarks for years by being defensive when others were aggressive.
The fact that he’s willing to step out on offense now carries real weight.
The Bigger Picture: End of U.S. Exceptionalism?
I’ve been writing about markets for years, and one theme keeps coming up: the incredible outperformance of U.S. assets since the Global Financial Crisis.
S&P 500 crushing almost every other equity market. U.S. bonds as the world’s safe haven. The dollar as the undisputed reserve currency.
But every regime eventually ends. And when smart investors like Gundlach start positioning for “non-dollar outperformance,” it feels like we might be witnessing the early stages of the next chapter.
Maybe U.S. assets don’t crash. Maybe they just return to earth while the rest of the world catches up.
Either way, diversification suddenly feels a lot less academic and a lot more urgent.
I’ll be watching commodity indices and the dollar closely over the coming months. If Gundlach is even half right, 2026 could look very different from the past decade.
And if there’s one thing I’ve learned following investors like him, it’s that when they change their mind on something big, it’s usually worth paying attention.
The game might have just changed. Again.
