Amid market volatility and economic uncertainty, the latest quarterly Retail Investor Beat from online broker eToro reveals that retail investors see gold as the number one hedge in response to a weaker dollar.

The study, which surveyed 10,000 retail investors across 12 countries, revealed that nearly half (48%) of retail investors have either adjusted or plan to adjust their portfolios in anticipation of a weaker USD. When asked about their strategies for asset allocation in anticipation of a weaker USD, the most frequently cited response was to invest more in gold, mentioned by 29% of retail investors.

This was followed by reducing investments in US stocks (25%), increasing investments in non-US stocks (24%), and holding more money in cryptoassets (24%).

Investor sentiment towards gold is bullish, with the majority (57%) expecting gold prices to rise in the next 6-12 months. 45% of retail investors already hold gold positions with half of them having started to invest in gold within the last two years. Among those not currently invested in gold, 27% are considering it.

Retail investors trust in the US as the region with the strongest long-term return potential is declining. From 45% in Q4 2024, confidence dropped to 34% in Q2 2025, confirming the ongoing shift. Only the youngest cohort of retail investors, the Gen Z, maintain the same level of optimism (45% in Q2 2025 compared to 46% at the end of 2024).

In contrast, sentiment towards Europe is improving, with 29% of investors seeing it as the region with the strongest long-term return potential, up from 20% in the last quarter of 2024. Sentiment towards returns from China rose from 24% in Q4 2024 to 26% in Q2 2025, emerging markets from 17% to 20%, Japan from 12% to 14%, the UK from 8% to 11% and Australia from 7% to 8%.

The latest Retail Investor Beat shows that more than a quarter (26%) of retail investors now view the state of the global economy and a potential recession as the biggest threat to their investments, up from 18% a year ago. In contrast, inflation – the top concern a year ago – now ranks second at 19%, marking a significant reordering of investor fears.

Generational analysis shows that Gen X and Baby Boomers are the most concerned about a potential recession (30% each), while Gen Z and Millennials still view inflation as the primary risk (23% each).

Commenting on the data, eToro’s Global Market Strategist Lale Akoner, said:

“Given the magnitude of market fluctuations in the first few months of 2025, it is not surprising that investors are increasingly wary of the global macroeconomic situation. This market turbulence, combined with ongoing ambiguity around future international trade dynamics, is shaping what retail investors perceive as risk. With shorter investment horizons, older generations of investors have less time to recover from losses, so market uncertainty hits their sense of financial security harder.”