Gold Prices Have Hit Record Highs, But Warren Buffett Has Long Been a Skeptic

Gold prices have surged to new all-time highs in 2025, as both investors and central banks increase their holdings in the yellow metal to hedge against inflation, economic risks, and the threat to the Federal Reserve’s independence. However, legendary investor Warren Buffett has long voiced skepticism about gold as a long-term investment.

In this article, we revisit Buffett’s stance, examine his brief pivot into gold mining during the COVID era, and explore when gold might make sense in a long-term portfolio.

Warren Buffett’s Longstanding Skepticism Toward Gold

Buffett has consistently criticized gold as an investment. In his 2011 Berkshire Hathaway shareholder letter, he described gold as ”neither of much use nor procreative,” emphasizing that it does not produce cash flow or create value over time

Similarly, Buffett remarked in a 2011 interview with CNBC that “gold is a way of going along on fear.” What he meant was that the price of gold relies on market sentiment and demand. When people grow more fearful of the economy, demand for gold rises and its price increases. But if people become less fearful, demand falls, and its price decreases. Ultimately, Buffett’s preference is for assets that generate cash flow and compound over time.

The 2020 Surprise: Berkshire’s Brief Bet on Gold Mining

In the second quarter of 2020, Buffett’s Berkshire Hathaway disclosed that it held a $565 million stake in one of the largest gold mining companies in the world, Barrick Gold Corp (NYSE: B).

This decision may have been surprising given Buffett’s point of view about gold as an investment. While it may have been the decision of one of Berkshire Hathaway’s portfolio managers, Ted Weschler or Todd Combs, and not Buffet himself, it was still a notable and industry-altering decision at the time.

However, Berkshire Hathaway’s position in the gold mining company was relatively short-lived. The company sold off its shares of Barrick Gold by the end of Q4 2020.

Why Gold Is Surging Now

In 2025, the price of gold has risen to all-time highs as macroeconomic uncertainty, inflation concerns, and political tensions have made the metal attractive.

However, today’s economic environment contrasts with the low-inflation, less volatile environment at the onset of the COVID-19 pandemic, right before Berkshire Hathaway invested in Barrick Gold in the second quarter of 2020. At that time, inflation was hovered around historically-low levels as the pandemic weighed on global economic activity. Although down from a historic high of 9% in June 2022, as of July 2025 inflation was rising, hovering at 2.7%. In August, it rose at a faster 2.9% annual pace.

As inflation remains elevated, some investors might find gold attractive as a safe haven in an increasingly uncertain economy.

When Might Gold Make Sense—Even for a Buffett-Inspired Investor?

While Buffett largely avoids gold, some scenarios may justify a modest allocation in your portfolio. For example, investors seeking portfolio diversification, insurance against market volatility, or assets that are not correlated with equities might consider investing in gold.

“For investors focused on growth and income, I recommend a 90-10 stocks-bonds split, with up to 2.5 percentage points of the 90% allocated to gold as a hedge against inflation,” certified financial planner and chartered financial consultant Laura DiFiglio of Northwestern Mutual told Investopedia via email.

How to Think About Gold in a Long-Term Portfolio

It’s crucial to weigh opportunity cost and current market volatility when considering adding gold to your portfolio. Since commodities tend to act as a hedge against inflation rather than a vehicle for growth, it’s advisable to keep gold allocations modest. Ensure that your exposure aligns with your risk tolerance and investment timeline.

On Sept. 11, 2025, at a launch event for Abu Dhabi Finance Week, scheduled for December, hedge fund Bridgewater Associates founder and former CEO Ray Dalio described gold’s potential defensive role in any portfolio. Gold might be a way for investors to shield themselves from markets that are unhealthy because they are burdened with debt, Dalio said. Investors could hedge that risk with a 10% to 15% allocation to gold, Dalio added.

The Bottom Line

Buffett’s skepticism toward gold remains clear: it is a nonproductive asset that does not generate income. While recent price surges may be tempting to investors, long-term wealth is built through assets that produce cash flow and compound over time. Gold may serve a hedging role, but it should not replace a disciplined, value-oriented investment strategy.