Renowned investor Warren Buffett is loading up on gold.
Kitco reported that Buffett bought slightly below 21 million shares of Barrick Gold on August 14, 2020.
The current stake is worth $563 million.
Although the Barrick stock hit a low of $26.99 on August 14, it accelerated upward to $29 after Buffet’s purchase was announced
In addition, Buffett increased his holdings of Suncor stock by adding 4.25 million shares.
Buffett sold off airline stocks, such as United Airlines and American Airlines. Additionally, he sold holdings in financial institutions such as JPMorgan and Wells Fargo.
Historically, Buffett has not been a big fan of gold. During a speech he gave in 1998 at Harvard University, he said the following about gold:
(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.
During a 2009 CNBC interview, Buffett expressed his skepticism regarding gold’s performance:
I have no views as to where it will be, but the one thing I can tell you is it won’t do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money, and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.
That said, the game has changed thanks to the current Wuhan virus pandemic.
Thanks to the economic uncertainty caused by the lockdowns, countless people are flocking to gold because of its proven track record as a store of value.
Buffett is one history’s greatest investors. It’s a telling sign that even he, a gold skeptic, is getting in the gold game now.
Actions speak louder than words. Buffet’s behavior indicates that he understands the value of possessing gold and it’s likely a sign that he might not be so optimistic about general economic prospects in the future.