Billionaire Ray Dalio said gold is "definitely" a better safe haven than the dollar and that its record rally is similar to the 1970s, when it surged amid high inflation and economic uncertainty.

Dalio, founder of hedge fund firm Bridgewater Associates, made the comments at a conference on Tuesday when he was asked if he agreed with Ken Griffin of Citadel Investments that gold's rise reflects anxiety about the U.S. currency.

"Gold is a very good portfolio diversifier," Dalio said during a panel discussion at the Greenwich Economic Forum in Connecticut. "So if you just look at it from a strategic asset allocation perspective, the optimal portfolio would probably be about 15% in gold."

The federal government shutdown and speculation that the Federal Reserve will continue to cut interest rates even if inflation remains high have pushed gold prices up more than 20% since late July, to around $4,000 an ounce. Meanwhile, the US dollar has weakened against all major currencies this year as uncertainty sparked by US President Donald Trump has led to its biggest drop since the 1970s, shortly after the US abandoned the gold standard.

Dalio said he sees gold as a strong store of value amid rising government debt burdens, geopolitical tensions, and eroding confidence in the stability of fiat currencies.

He noted that gold's surge is similar to the early 1970s, when it also rallied alongside stocks.

He expressed reservations about the recent stock market gains, which have sparked concerns about an AI bubble as valuations soar.

"It feels a bit frothy to me," Dalio said.

Dalio said the speculation surrounding AI has the hallmarks of a bubble, comparing it to previous innovation booms, from the excessive speculation driven by patent activity and technological breakthroughs in the late 1920s to the dot-com era of the late 1990s.

Nevertheless, he said he sees opportunities to capitalize on the benefits of AI, both for companies that leverage it to achieve significant efficiency gains and for those that provide the platform for the technology. He also said that despite his reservations about valuations, he would remain cautious and would not easily bet against shorting those mega-cap technology stocks.