Retail Capital Rotates into Gold and Foreign Bonds as USD Outlook Sours

Retail investors are aggressively diversifying portfolios away from cash and domestic equities, pivoting instead toward commodities and foreign bonds in response to a weakening U.S. Dollar. New data from eToros Retail Investor Beat, covering Q4 2025, highlights a structural shift in retail behavior characterized by increased discipline and macro-awareness.

Positioning for a Weaker Greenback

The survey, which polled 11,000 investors across 13 countries, reveals that 49% of respondents plan to adjust their portfolios specifically to navigate a softer U.S. Dollar. This sentiment has manifested in tangible asset allocation shifts:

• Gold ownership climbed to 48%, up three percentage points since Q2 2025.
• Foreign bond holdings surged by 14 percentage points year-over-year.
• Commodities exposure rose by 11 percentage points.

Conversely, allocations to domestic equities and cash have declined, suggesting a move further out on the risk curve or into inflation-hedging assets in anticipation of currency debasement. Lale Akoner, Global Market Strategist at eToro, noted that investors are “increasingly allocating capital with diversification firmly in mind across a broader opportunity set,” utilizing these shifts as a deliberate risk-management tool rather than speculative opportunism.

Gen Z Leads in Market Participation

Beyond asset allocation, the study underscores resilient engagement levels among younger demographics despite macro headwinds. 87% of Gen Z and 86% of Millennials invest monthly, significantly outpacing the 68% participation rate of Baby Boomers.

This cohort, having entered the market during periods of high volatility and monetary policy uncertainty, appears to be adopting a more sophisticated approach to portfolio monitoring. Akoner described this demographic as “engaged, deliberate and consistent,” marking a departure from the “meme stock” volatility observed in previous cycles.

(Note: Data derived from eToro survey conducted Oct 30 – Nov 13, 2025.)