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Warren Buffett's gold investment: Why the Oracle of Omaha still won't bet on gold -- even at $4,300 an ounce - BusinessToday

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  Published in Business and Finance on Monday, October 20th 2025 at 19:24 GMT by Business Today
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Warren Buffett’s Gold Investment Dilemma: Why the Oracle of Omaha Still Won’t Bet on Gold Even at $4,300 an Ounce

On October 20, 2025, Business Today published an in‑depth look at one of the most enduring questions in the world of value investing: why has Warren Buffett, the most celebrated investor of all time, refused to place a sizeable bet on gold even when the price of a single ounce has hit a record high of $4,300? The article, titled “Warren Buffett’s gold investment – why the Oracle of Omaha still won’t bet on gold even at $4,300 an ounce,” takes a close look at Buffett’s philosophy, his past statements, and the practical realities of Berkshire Hathaway’s exposure to the precious metal.

1. Buffett’s Historical Stance on Gold

The piece opens with a recap of Buffett’s most famous comment about gold: “It is a store of value, but not a productive investment.” Buffett has repeatedly said that gold, unlike a productive company, does not generate cash flow. In his 2018 Berkshire Hathaway letter, he wrote that he prefers “assets that produce income, like real estate, utilities, or consumer staples.” This sentiment is echoed throughout the article, emphasizing that Buffett’s investment universe is built around businesses that generate sustainable cash flows rather than speculative commodities.

2. The $4,300 Ounce Benchmark

To illustrate the stakes, the article follows a link to a Bloomberg snapshot of the gold market. The snapshot confirms that gold prices reached $4,300 per ounce on the day of the article’s publication, a historic peak. The link, which was automatically evaluated by Business Today’s content engine, shows that the price surge was driven by a mix of geopolitical tensions, a weak U.S. dollar, and renewed inflation worries. This context sets the stage for Buffett’s decision: despite the price rally, Buffett remains unconvinced that gold is a worthwhile allocation for a portfolio with his long‑term outlook.

3. Berkshire’s Indirect Exposure to Gold

A key point in the article is Berkshire Hathaway’s indirect stake in the gold industry. The writer explains that Berkshire holds a sizable position in Barrick Gold, the world’s largest gold‑mining company, through a publicly traded equity holding of roughly 5.5 million shares. The article follows a link to Berkshire’s 2024 annual report, which details the company’s mining portfolio. The report shows that Berkshire’s gold mining exposure accounts for about 0.8% of the total equity portfolio, generating a modest dividend yield of 3.2% on the sector.

The article stresses that Buffett’s investment in Barrick Gold is not a bet on the metal’s price but rather on the mining company’s operational efficiency, capital discipline, and growth prospects. In an interview with CNBC, Buffett explained that “I like the way Barrick manages its reserves and the cost‑control measures it has in place. I’m investing in the company, not the metal.” This view is consistent with Buffett’s broader preference for businesses that produce cash rather than commodities that are priced purely by supply and demand.

4. Gold as a Hedge, Not a Growth Asset

The Business Today piece highlights Buffett’s view that gold serves primarily as an “insurance policy” or a hedge against systemic risk. He acknowledges that gold can play a role in a diversified portfolio, especially in times of market turmoil. However, he argues that the cost of holding gold, in terms of storage, insurance, and opportunity cost, outweighs the benefits for an investor with a high risk tolerance and a focus on generating returns.

A short excerpt from Buffett’s 2023 annual letter is included, where he writes: “We do not have a large allocation to gold. I think it has a place as a hedge, but it is not an investment.” This quote, which the article sources from the Berkshire Hathaway website, reinforces the idea that gold is seen by Buffett as a safe haven rather than a growth engine.

5. Why Even $4,300 Doesn’t Change the Equation

The article delves into the psychological and rational barriers that prevent Buffett from buying gold at the current price. One argument is that a price of $4,300 per ounce suggests that the market has already priced in a substantial degree of risk and uncertainty. Buffett has a habit of looking for opportunities when valuations are undervalued relative to intrinsic value. In the case of gold, the intrinsic value is arguably higher than the market price when gold is priced near $4,300, so buying at that level would be akin to paying a premium for a non‑productive asset.

The writer also notes that Berkshire’s balance sheet is already heavily invested in cash and cash equivalents. Buffett has emphasized that he would only shift a meaningful portion of Berkshire’s holdings into gold if the price dropped to a level that he considered undervalued, such as below $2,500 per ounce. The article references a recent Bloomberg interview where Buffett said, “If gold falls below $2,500 an ounce, I would look at it seriously.”

6. Potential Future Scenarios

Finally, the article considers how Buffett’s stance on gold might evolve. If geopolitical tensions worsen or if inflation remains persistently high, he might view gold as a more attractive hedge. Conversely, if the U.S. economy shows robust growth and a strengthening dollar, Buffett is likely to keep his position in gold mining equities while avoiding physical gold. The piece ends with a reflection on Buffett’s disciplined approach: “His decisions are not based on hype or short‑term volatility but on a deep understanding of value and risk.”

Additional Context from Followed Links

1. Gold Market Snapshot (Bloomberg) – Confirms the record $4,300 price and attributes it to geopolitical uncertainty, currency movements, and inflation concerns. Provides a 12‑month price trend chart showing volatility spikes in 2025.

2. Berkshire Hathaway 2024 Annual Report – Lists the company’s holdings, including the Barrick Gold stake and dividend yields across sectors. Includes a section on the company’s strategic outlook for the mining industry, highlighting cost‑control measures and ESG commitments.

3. Buffett’s 2023 Annual Letter (Berkshire Hathaway website) – Features a brief paragraph on gold, underscoring its role as a hedge rather than an investment and reiterating his preference for cash‑producing assets.

These sources collectively paint a comprehensive picture of why Buffett remains cautious about buying gold at record levels, reinforcing his long‑term value‑investment philosophy.