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Warren Buffett is considered the world’s richest investor. But he never invested in gold. They also give a big reason for this.
Warren Buffett’s unique investment Philosophy is not gold, business correct. (Image: AI) Why don’t you buy gold?
Buffett says that gold is used in jewelry and some industrial work, but as an investment, it is weaker than productive assets like farm or business in the long run. They believe that if you buy an ounce of gold and keep it for years, then even after years you will have the same gold, it will increase or will not create anything new. In 2011, he told the shareholders that there are two major disadvantages of gold- it is not very useful nor produces anything new. Due to this thinking, Buffett never invested directly in gold. Yes, he once put money in the gold mining company Barrick Gold, but got out of it in just six months.
In 2011, the price of gold was $ 1,750, which has been around $ 3,350 today. That is, doubled in 14 years. Hearing is a big advantage, but its annual return (CAGR) is only 5 percent, while the US stock market gave more than 14 percent returns during this period. According to this, the thinking of Buffett proves to be correct. From 2011 to 2020, the price of gold fell and then returned to the old level. The real bounce came after 2020, when gold rose 90 percent in 5 years.
Why does the price of gold increase?
According to Buffett, the price of gold increases due to fear- such as fear of falling currency, economic uncertainty or political stress. In recent years, US dollar weakness, rising debt and burden of interest rates, decline in credit rating and Trump’s tariff war has drawn investors towards gold. At present, America’s debt is 36.93 trillion dollars and only $ 1.02 trillion has paid interest in 2025. The dollar index has fallen 4 percent so far in 2025. Gold trade is done in the dollar, so the price of gold increases when the dollar is weak. Buffett believes that in the long run, business and productive assets give more returns than gold. His philosophy is that ‘fear when people are greedy, and when people are afraid, become greedy.’ Even in the case of gold, they follow this principle and do not hurry to buy gold even in fear.
Rakesh Singh is a Chief Sub Editor with 14 years of Experience in Media and Publication. International Affairs, Politics and Agriculture Area of Interest. Many articles written by rakesh singh published in …Read more
Rakesh Singh is a Chief Sub Editor with 14 years of Experience in Media and Publication. International Affairs, Politics and Agriculture Area of Interest. Many articles written by rakesh singh published in … Read more
