Warren Buffett has zero gold in his $140B fortune — Here’s why
Warren Buffett reigns supreme in the world of investments. Known for his stock-picking acumen, Buffett has been the undisputed king of the stock market.
And, how much is his net worth? $A cool 140 billion, or nearly Rs 12 lakh crore.
That’s a huge amount. But here’s where it gets interesting. Unlike you and me, he does not own any gold.
When it comes to investing in gold, Warren steers clear. He has zero investments in gold. Warren Buffett’s golden rule is not to invest in assets such as gold.
Over the years, he has maintained that gold does not align with his value investing strategy. Buffett’s sole gold investment was in Barrick Gold, a gold-mining company, which he exited within six months. ( The investment may have been made independently by one of Buffett’s in-house money managers).
Why Warren Buffett has no holdings in gold?
Buffett considers gold to be a non-productive asset. In his own words, Warren said to his shareholders in 2011, “Gold has two significant shortcomings, being neither of much use nor procreative.”
He acknowledged that gold has some industrial use and as jewellery, but beyond that, it’s a dud investment.
In a classic example of the debate over whether to invest in farmland or gold, Buffett argued that productive assets, such as farms and businesses, are considerably superior long-term investments compared to lifeless assets, like gold.
But that was his stand in 2011. Recently, gold has been on a breakout rally. So, was Buffett wrong on his call on gold?
Gold was $1,750 in 2011, and it is now trading around $3,350. In the fourteen years after Buffett first opposed gold as an asset class, the price of gold has doubled.
But wait. In terms of compound annualised growth rate (CAGR), it is only 5%. US stocks are up over 14% CAGR during the same period. So, in a sense, Buffett stands vindicated.
But, aren’t gold investors sitting on big gains too? Yes, that’s because, historically, gold has experienced long periods of stagnation before suddenly spiking.
Between 2011 ( when he gave that farmland or gold example) and 2020, gold saw a big decline in price and recovered to $1,750 only in 2020.
Only after 2020, investors are experiencing their golden moment as gold has increased by over 90% over the past five years.
Buffett found no reason to invest in gold. In his words, “Gold is 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,” said Buffett.
In 2009, when gold was at $1,000 he was asked where he sees gold in five years, his famous quote is – “It won’t do anything, except look at you”. Believe it or not, after peaking at $1,800, gold fell back to $1,000 by 2014. Investors ended up staring at their gold investment with no returns in those five years.
Gold and Fear
Warren Buffett’s famously quoted wisdom for investors is to “be fearful when others are greedy and greedy only when others are fearful.” Even in the context of gold, he places fear as the reason why the gold price moves.
Buffett believes that individuals acquire gold out of fear, and that its value is determined by the notion that this scared group will grow.
Rising prices spark increased buying enthusiasm, attracting more buyers who view the increase in gold price as validating an investment thesis, creating a temporary ‘bandwagon’ investor base, says Buffett.
Let’s look at some of the reasons that have led to fear-buying of gold in the recent past. Buffett believes the fear of currency collapse fosters movement to inert assets such as gold.
The status of the dollar as the world’s reserve currency is under threat. That works in favour of gold.
The interest burden on US debt is getting messier. On a debt of $36.93 trillion, the US has already paid interest of over $1.02 trillion so far in 2025. Further, Moody’s Ratings had already downgraded the US government’s credit rating due to fiscal debts and rising interest costs. As a result, the US dollar index is under pressure, having slipped nearly 4% so far in 2025.
Gold is traded in dollars in international markets, and any weakness in it results in a strengthening of the gold price.
Buffett has again been vindicated. Although geopolitical scenarios appear to be under control, Trump’s tariff-led trade conflicts, fears of US inflation, and a weakening of the dollar are fueling economic fears, as Buffett stated.
Summing Up
Buffett’s prowess in money-making and business acumen is considered to be unmatched in the financial world. Buffett kept his investment style as simple as it can be – buy undervalued investments and reap benefits over the long term.
In his scheme of things, there’s no place for an unproductive asset such as gold.
While Buffett’s success is exemplary, retail investors may find it hard to follow his approach.
Gold trades around $3,400 in international market while gold price today in India is Rs 1,01,920.
To me, you should own gold. Though gold should not be more than 10% of one’s portfolio. As we have seen in the past, there are extended periods of no return on gold, but when it moves, the portfolio is hedged. Especially when the fear factor is at play.