{"id":17481,"date":"2025-05-06T01:54:45","date_gmt":"2025-05-06T01:54:45","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2025\/05\/06\/3-things-warren-buffett-has-said-about-gold\/"},"modified":"2025-05-06T01:54:45","modified_gmt":"2025-05-06T01:54:45","slug":"3-things-warren-buffett-has-said-about-gold","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2025\/05\/06\/3-things-warren-buffett-has-said-about-gold\/","title":{"rendered":"3 Things Warren Buffett Has Said About Gold"},"content":{"rendered":"<\/p>\n
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Warren Buffett has a formidable reputation as an investor \u2014 w<\/strong>ith a net worth of US$160 billion in May 2025, he\u2019s among the world\u2019s richest people and a business role model for many.<\/strong><\/p>\n

\tBuffett, who run his company Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B) for over 60 years, made waves when he announced in May 2025 that he would be stepping down as CEO at the end of the year, although he will stay on as chairman. <\/p>\n

Buffet is also well known for being uninterested in gold. For those wondering Buffett invests in gold, he has made his stance on the yellow metal abundantly clear over the years, and it\u2019s not positive \u2014 put simply, he doesn\u2019t think gold fits in with his strategy of value investing, which involves picking stocks that are trading for less than they are worth.<\/p>\n

\tGiven Buffett\u2019s aversion to gold, market watchers were understandably surprised when Berkshire Hathaway invested in Barrick Gold (TSX:ABX,NYSE:GOLD) in Q2 2020, paying around US$560 million for about 21 million shares of the major gold miner.<\/p>\n

\tWhat was behind that decision? Many headlines proclaimed that Buffett had changed his mind on gold. But there were plenty of counterpoints \u2014 some suggested that it could have been another person at Berkshire that made the trade and not Buffett himself; others pointed out that there\u2019s a difference between investing in gold and investing in a gold-mining company. Still others noted that Berkshire\u2019s stake in Barrick was relatively small compared to its other holdings.<\/p>\n

\tUltimately, Buffett and Berkshire\u2019s position in Barrick turned out to be a short one. Berkshire Hathaway exited only two quarters later, which was just long enough to reap the rewards of gold\u2019s big bump from the COVID-19 crisis. Perhaps the Oracle of Omaha was clued in to the precious metal\u2019s status as a safe-haven asset in times of economic uncertainty.<\/p>\n

\tWhatever the reason for the moves at Berkshire, it\u2019s interesting to look back at some of the comments Warren Buffett has made about gold. While he hasn\u2019t spent a huge amount of time discussing gold (after all, he doesn\u2019t like it), he\u2019s spoken enough about it that there\u2019s no mistaking his stance. Here\u2019s a look at three quotes that sum up what Warren Buffett thinks about gold.<\/p>\n<\/div>\n

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What has Warren Buffett said about gold? <\/h3>\n

1. \u201cGold \u2026 has two significant shortcomings\u201d
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\u201cGold \u2026 has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end\u201d
\u2014 Warren Buffett, letter to shareholders, 2011<\/p>\n

Warren Buffett\u2019s 2011 letter to shareholders includes a fairly lengthy discussion on gold, which hit what was then an all-time high of around US$1,920 per ounce in September of that year.<\/p>\n

In the letter, Buffett lays out three types of investments, placing gold squarely in the second category, which involves \u201cassets that will never produce anything.\u201d Buyers purchase these assets, according to Buffett, with the hope that someone else will pay more for them in the future. \u201cOwners are not inspired by what the asset itself can produce \u2014 it will remain lifeless forever \u2014 but rather by the belief that others will desire it even more avidly in the future,\u201d he states in the letter.<\/p>\n

Gold advocates reacted strongly to those comments, arguing that the point of gold isn\u2019t what it can produce; instead, its value comes from the fact that it\u2019s a source of protection in times of crisis.<\/p>\n

Others have pointed out that gold does in fact have a good track record of producing returns. Responding specifically to Buffett\u2019s comment that an ounce of gold will always only be an ounce of gold, Frank Holmes, chief investment officer at U.S. Global Investors (NASDAQ:GROW), said that the Oracle of Omaha is simply wrong about the yellow metal.<\/p>\n

\u201cBuffett\u2019s always been negative on gold; his own company doesn\u2019t pay a dividend, and his argument before was (that) gold doesn\u2019t pay income,\u201d Holmes said. \u201cHe\u2019s totally wrong. Since 2000, bullion has far outperformed the S&P 500 (INDEXSP:.INX) by two to one, and it\u2019s outperformed Berkshire Hathaway.\u201d<\/p>\n

2. \u201cIt won\u2019t do anything \u2026 except look at you\u201d<\/h4>\n

\u201cI have no views as to where (gold) will be (in the next five years), but the one thing I can tell you is it won\u2019t do anything between now and then except look at you\u201d \u2014 Buffett, CNBC\u2019s Squawk Box, 2009<\/p>\n

Most of the other things Buffett has said about gold relate to the two failings he mentions in his 2011 letter to shareholders: the metal\u2019s lack of utility and the fact that it\u2019s not procreative.<\/p>\n

During a 2009 episode of CNBC\u2019s Squawk Box, Buffett aired his thoughts on those issues in a slightly different way. Speaking about gold in the next five years and if it should be part of a value investing strategy, Buffett said he had no opinion on where it might go \u2014 \u201cThe one thing I can tell you is it won\u2019t do anything between now and then except look at you,\u201d he said.<\/p>\n

That\u2019s in contrast to stocks like Coca-Cola (NYSE:KO) and Wells Fargo & Company (NYSE:WFC), which Buffett said would be generating money, and lots of it. He explained, \u201cIt\u2019s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.\u201d<\/p>\n

The comment ends with another of Buffett\u2019s well-known lines on gold, which he\u2019s repeated in various ways over the years: \u201cThe idea of digging something up out of the ground, you know, in South Africa or someplace and then transporting it to the United States and putting into the ground, you know, in the Federal Reserve of New York, does not strike me as a terrific asset.\u201d<\/p>\n

For Buffett, value relates back to usefulness, and without a specific use gold has neither. Interestingly, the same thought process does not apply to silver \u2014 Buffett has put money into silver before, and believes its dual nature as both a precious and an industrial metal make it useful and therefore valuable.<\/p>\n

3. \u201cGold is a way of going long on fear\u201d<\/h4>\n

\u201cWith an asset like gold, for example, you know, basically gold is a way of going long on fear, and it\u2019s been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in the year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money. But the gold itself doesn\u2019t produce anything\u201d \u2014 Buffett, CNBC\u2019s Squawk Box, 2011<\/p>\n

Warren Buffett has also spoken fairly extensively about his belief that people who buy gold are essentially betting on fear. The quote above is from a 2011 episode of CNBC\u2019s Squawk Box, but he also brings this idea up in his 2011 letter to shareholders.<\/p>\n

\u201cWhat motivates most gold purchasers is their belief that the ranks of the fearful will grow,\u201d he says in the letter. And indeed, gold is often described as a safe-haven investment, meaning that people flock to it in times of turmoil in order to feel more secure and to balance out other areas of their portfolios.<\/p>\n

While Buffett admits that \u201cduring the past decade this belief has proved correct\u201d \u2014 in other words, fear did spur gold demand \u2014 overall he sees going long on fear as a problem. Again he goes back to the idea that gold lacks utility and is not procreative.<\/p>\n

As he explains, all the gold in the world at the time would be worth US$7 trillion. By his calculations, that\u2019s equivalent to roughly a billion acres of farmland in the US plus seven ExxonMobils (NYSE:XOM) and with an additional US$1 trillion to spare.<\/p>\n

\u201cAnd if you offered me the choice of looking at some 67-foot cube of gold \u2026 and the alternative to that was to have all the farmland of the country, everything, cotton, corn, soybeans, seven ExxonMobils. Just think of that. Add $1 trillion of walking around money. I, you know, maybe call me crazy but I\u2019ll take the farmland and the ExxonMobils,\u201d he said.<\/p>\n<\/div>\n

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Will Warren Buffett change his mind about gold? <\/h3>\n

Berkshire\u2019s Barrick investment was certainly a surprise for many, but it doesn\u2019t necessarily mean that Buffett has changed his mind about gold. He\u2019s been consistent in his approach to the precious metal for years, and it seems unlikely that he\u2019ll do an about-face any time soon.<\/p>\n<\/div>\n

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n

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This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

Warren Buffett has a formidable reputation as an investor \u2014 with a net worth of US$160 billion in May 2025, he\u2019s among the world\u2019s richest people and a business role model for many. Buffett, who run his company Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B) for over 60 years, made waves when he announced in May 2025 that he […]<\/p>\n","protected":false},"author":0,"featured_media":17482,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-17481","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/17481","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=17481"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/17481\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/17482"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=17481"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=17481"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=17481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}