We have fairly little data on gold as a freely available modern asset class (around 50 years), but yes, in small amounts it can limit volatility and potentially even increase returns (or at least: risk-adjusted returns). That said, over the long haul, independently, it has tended to roughly track inflation. I'm not against it, just see it as something of limited utility to an ordinary investor.

Technically, everyone in the U.S. was an investor in gold up until 1971 since USD was supposedly backed 1-1 by gold :)

It's a little trickier than that, but yes, that's why I mentioned 50 years. Before that gold was a different animal.

Using minimum variance optimization with gold and spy produces a portfolio that is often 50% or more of gold. This beats the risk adjusted return of spy by a reasonable margin.

So I guess the point I'm making is that often a lot of gold makes sense too.