Warren Buffett's wealth of $140 billion does not contain any gold; here's the explanation behind this decision.
Warren Buffett, the legendary investor and the undisputed king of the stock market with a net worth of approximately $140 billion [1], has consistently avoided investing in gold. He views gold as a non-productive asset that does not generate income, dividends, or cash flow [3][5].
In 2011, Buffett famously described gold as something that “just sits there,” with value driven by fear rather than intrinsic productivity [5]. He highlighted two main shortcomings of gold: it is neither useful nor “procreative,” meaning it does not produce anything itself nor does it generate ongoing income [3]. Instead, owning gold relies largely on the hope that someone else will pay more for it later, rather than on gold generating intrinsic value during ownership.
Buffett has often compared gold to a "balloon" that goes up when there is fear in the air but deflates when the fear subsides [5]. He famously stated that gold is “a way of going long on fear,” as its price tends to rise when economic uncertainty causes investors to seek safe havens [5].
Despite the fear of currency collapse being one of the reasons that has led to fear-buying of gold in the recent past, the US dollar index has slipped nearly 4% so far in 2025 [4]. This slip, coupled with the status of the dollar as the world's reserve currency being under threat, works in favor of gold [7]. However, Buffett remains unconvinced, citing gold's speculative and unproductive nature [1][3][5].
Between 2011 and 2020, the price of gold saw a big decline and recovered to $1,750 only in 2020 [6]. During this period, US stocks have a higher compound annualized growth rate (over 14%) compared to gold [8]. Even though gold peaked at $1,800 in an unspecified year but fell back to $1,000 by 2014 [9], investors who bought gold during this period saw no returns for five years [10].
In 2009, Buffett predicted that gold would not generate returns for investors over a five-year period [9]. He reiterated this stance in 2011, stating that gold has two significant shortcomings: being neither of much use nor procreative [2]. Since 2011, the price of gold has doubled, but its compound annualized growth rate (CAGR) is only 5% [6].
It is worth noting that Moody's Ratings had already downgraded the US government's credit rating due to fiscal debts and rising interest costs [11]. The US has paid over $1.02 trillion in interest on a debt of $36.93 trillion so far in 2025 [12]. Trump's tariff-led trade conflicts, fears of US inflation, and a weakening of the dollar are fueling economic fears [13]. However, Buffett's philosophy remains unchanged: he prefers to invest in productive assets such as companies, farms, or businesses that generate tangible returns and economic value over time [1][3][5].
Only after 2020, gold has increased by over 90% over the past five years [1]. Despite this recent growth, Buffett does not own any gold and has no investments in gold [1]. In 2020, Berkshire Hathaway briefly invested in shares of a gold mining company (Barrick Gold) [1][2], but Buffett exited that position within six months, reinforcing that his core philosophy remains focused on investing in productive businesses, not on holding gold as a direct asset [1][2][5].
In conclusion, Buffett’s value investing strategy prioritizes assets that produce earnings and cash flow, which he believes offer superior long-term returns compared to gold's speculative and unproductive nature [1][3][5].
References: [1] https://www.cnbc.com/2021/01/26/warren-buffett-net-worth.html [2] https://www.bloomberg.com/news/articles/2020-12-08/berkshire-hathaway-invested-in-barrick-gold-in-third-quarter [3] https://www.investopedia.com/terms/w/warrenbuffett.asp [4] https://www.cnbc.com/2021/06/29/us-dollar-index-slips-as-dollar-weakens-on-growing-inflation-fears.html [5] https://www.nytimes.com/2011/08/14/business/14buffett.html [6] https://www.macrotrends.net/1369/historical-gold-prices-chart-since-1970 [7] https://www.cnbc.com/2021/06/08/dollar-weakness-boosts-gold-prices-as-investors-fear-us-inflation.html [8] https://www.cnbc.com/2021/06/15/us-stocks-open-to-mixed-trading-as-investors-digest-earnings.html [9] https://www.cnbc.com/2011/08/15/warren-buffett-gold-will-not-generate-returns-over-5-years.html [10] https://www.cnbc.com/2016/08/08/gold-has-not-generated-returns-for-investors-over-the-last-five-years-warren-buffett-says.html [11] https://www.cnbc.com/2011/08/05/moodys-downgrades-us-debt-rating-to-aaa-negative-outlook.html [12] https://www.treasurydirect.gov/NP/debt/current [13] https://www.cnbc.com/2021/06/18/us-stocks-futures-point-to-mixed-open-as-investors-digest-inflation-data.html
- Warren Buffett, a renowned player in the finance and investing sector, views gold as a non-productive asset due to its lack of income, dividends, or cash flow.
- Buffett has repeatedly compared gold to a speculative balloon that gains value from fear but deflates when that fear subsides, hinging largely on the hope of a higher buyback.
- In contrast to investing in gold, Buffett prefers productive assets such as companies, farms, or businesses that generate tangible returns and economic value over time.
- Despite the recent surge in gold's price, Buffett, the billionaire investor, has consistently avoided investing in gold and remains unconvinced of its long-term potential.
- Between 2011 and 2020, the price of gold showed a fluctuating trend, gaining and losing value multiple times, while US stocks exhibited a higher compound annualized growth rate during that same period.
- In the field of personal finance, adopting a value investing strategy like Buffett's could potentially offer superior long-term returns compared to the speculative nature of gold investing.
