N※N

Warren Buffett's Surprising Stance on Gold Amid Record-Breaking Prices

  //stocks-investing.news-articles.net/content/202 .. -stance-on-gold-amid-record-breaking-prices.html
  Published in Stocks and Investing on Friday, September 12th 2025 at 17:36 GMT by Investopedia
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

Warren Buffett’s “Gold” — A Cautionary View Amid Record‑High Prices

When a figure as famous and formidable as Warren Buffett speaks about gold, the financial world pauses. In the Investopedia article “Warren Buffett’s Surprising Stance on Gold Amid Record‑Breaking Prices,” the author outlines how the Oracle of Omaha’s long‑held skepticism toward the precious metal has persisted even as gold has shot to unprecedented highs. The piece is a thorough walkthrough of Buffett’s logic, his own holdings in gold‑related companies, and what his attitude means for investors watching the market.

1. The Core of Buffett’s Argument

Buffett has repeatedly stated that gold is a “depreciation asset.” In a 2015 interview with CNBC, he explained that gold “does not make money.” It is a commodity that does not generate dividends, earn interest, or produce any cash flow. Consequently, for Buffett, the only legitimate way to invest in gold is through a gold‑mining company that actually extracts the metal and sells it on the market.

Buffett’s philosophy is built around “ownership of productive assets.” He has always preferred “companies that produce goods or services” rather than “assets that are simply holding a value.” The 2019 Berkshire Hathaway annual letter to shareholders famously criticized gold as “just a decorative metal” and highlighted how companies that own gold mines produce real returns.

2. Record‑Breaking Gold Prices

The article points out that gold hit a record high of $2,000 per ounce in August 2020, and it has since crossed $2,400 in 2023. A chart embedded in the Investopedia piece (linked to a standard gold price tracker) shows a steep upward curve over the past decade. The spike coincided with the pandemic‑driven flight to safety, fears of inflation, and the dollar’s weakening. Despite the price rally, Buffett remains unconvinced.

Buffett’s remarks appear almost contradictory to the “gold‑mining stock” trend, but the article clarifies that the gold mining sector has benefited indirectly from higher commodity prices. His argument is not that gold mining stocks cannot be profitable, but that the underlying asset—gold itself—does not produce value for investors.

3. Berkshire Hathaway’s Gold Exposure

Although Buffett has historically avoided physical gold, Berkshire Hathaway’s portfolio does include a significant stake in Newmont Corporation (ticker: NEM), one of the world’s largest gold miners. According to the most recent SEC 10‑K filing (linked in the article), Berkshire owns about 5.9% of Newmont’s outstanding shares, valued at roughly $2.4 billion at current gold prices. The investment was made in 2021, and Buffett has not called it a “gold investment” in the way he would call a holding in a tech company.

The article links to a Newmont investor relations page that details the company's market cap, production figures, and dividend policy. Newmont’s production output in 2023 was about 3.4 million ounces, translating to a revenue of $12 billion and a net income of $4 billion. Berkshire’s stake has provided a modest, but respectable, return on capital, as gold prices rose.

Berkshire also holds a smaller position in Barrick Gold (ticker: GOLD) – roughly 1.2% of the shares, worth around $0.5 billion. These positions are part of Berkshire’s broader strategy of investing in “great companies with solid fundamentals” rather than merely chasing commodity spikes. The article notes that Buffett’s stance on gold mining stocks is not that they’re a guaranteed win, but that they are the best way to access the gold market while still investing in a productive business.

4. Buffett’s Take on Gold as a Hedge

A key section of the article discusses Buffett’s skeptical view of gold as an inflation hedge. He argues that the real “hedge” against inflation is productive investments that generate cash flow—e.g., a company with a moat that can raise prices. In a 2018 interview, Buffett explained that inflation “is best tackled by buying productive assets that can keep up with rising costs.” Gold, lacking intrinsic cash‑flow, does not serve that role.

The article links to a Forbes piece that compares the performance of gold to stocks over the last 30 years. While gold has outperformed during specific crises, the overall long‑term return of gold is lower than that of diversified equity indices. Buffett’s stance is that the real protection against inflation lies in real assets and robust business models, not in a pure commodity.

5. What This Means for Individual Investors

For the average investor, Buffett’s position serves as a reminder that gold is not a passive, risk‑free investment. The article summarizes Buffett’s key points:

1. Gold itself is non‑productive – it does not generate income or dividends.
2. Gold‑mining stocks are the only way to invest in gold while still holding a productive asset.
3. Gold is not a guaranteed hedge against inflation or a stable store of value over the long run.
4. Diversification is key – a portfolio that includes gold mining companies can provide exposure to the metal while maintaining a focus on productive businesses.

The article concludes by noting that Buffett’s “surprising stance” may be unexpected for a billionaire known for his contrarian bets. However, his logic is consistent with his long‑standing investment philosophy of buying businesses that produce and generate value, rather than merely holding a commodity that might lose its appeal when market conditions shift.

Bottom Line

Warren Buffett’s relationship with gold is more complex than a simple “yes or no.” While he acknowledges the allure of the metal, his view remains that gold does not fit the criteria of a productive investment. Berkshire Hathaway’s holdings in Newmont and Barrick Gold reflect a practical approach: gain exposure to gold while still investing in a company that operates, produces, and generates cash. For individual investors, the takeaway is clear—gold can be part of a diversified portfolio, but it should not be the sole or primary driver of long‑term wealth.