Warren Buffett, the iconic investor and outgoing CEO of Berkshire Hathaway, has long shunned gold as an investment. But over the past 25 years, the precious metal has quietly staged one of the most significant and enduring bull markets in financial history—outpacing the S&P 500 and even rivaling Buffett’s own conglomerate in terms of performance.
Back in 1998, Buffett famously dismissed gold’s investment merit during a speech at Harvard University:
“[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
At the time, gold had been mired in a long-term bear market, and Buffett’s critique reflected a widely shared sentiment. But what followed was a reversal that few foresaw.
Gold’s Historic Run
Since 2000, gold has delivered a compound annual growth rate (CAGR) of 10.67%, soaring from around $280 per ounce to more than $3,300 as of May 2025. In comparison:
The S&P 500, including dividends, returned a CAGR of approximately 6.5%.
Gold’s total price appreciation exceeded 1,000%, while the S&P 500 rose about 400% over the same period.
Gold’s role as a hedge against volatility also became evident during key financial crises:
During the 2000 dotcom collapse, 2008 financial crisis, and 2020 COVID-19 panic, gold either held firm or outperformed equities.
Notably, in 2008, the S&P 500 fell 38%, while gold rose more than 4%.
A Rival to Berkshire Hathaway
Gold’s long-term performance has even matched that of Buffett’s own company:
From 1998 to early 2025, both gold and Berkshire Hathaway’s Class A shares appreciated by roughly 500%–550%.
Between 2000 and 2020, gold rose 532%, outpacing Berkshire’s 322% gain.
Despite acknowledging risks in the U.S. stock market and expressing doubts about the dollar’s future, Buffett has notably avoided gold. Instead, Berkshire has increased cash reserves—now exceeding $300 billion—while paring down holdings in major firms like Apple. His pivot to Japanese equities, however, has puzzled some analysts, especially given Japan’s well-documented economic challenges: a shrinking population, government debt surpassing 250% of GDP, and persistently low interest rates.
Gold’s Case Strengthens
Gold’s long-term performance has prompted renewed interest from investors seeking protection against inflation, geopolitical risk, and currency devaluation. Its low correlation with equities, now at a 10-year low, reinforces its value in a diversified portfolio.
While Buffett’s broader investment legacy remains unmatched, his enduring skepticism toward gold has left a notable gap in Berkshire’s strategy—particularly as the metal continues to demonstrate resilience amid global uncertainty and fiscal imbalance.
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