Why Warren Buffet does not invest in gold – and other top investors avoid it too


At the turn of the millennium, the price of gold was valued at just £336 ($460) per ounce after being adjusted for inflation. However, this has risen dramatically over the last two decades and is now valued at £1,326 ($1,815) as of August 2021. Despite this, investors such as Warren Buffet have slammed the gold as an investment, criticising it as an asset with “no utility”.

There are many ways to decide to invest in gold. People can choose to buy gold physically by purchasing coins, bars and ingots, which is usually how many start getting into investing.

Furthermore, some banks offer gold accounts to their customers which allow them to invest in gold that they own.

It is also possible to invest in gold related companies through the stock market with people buying shares in companies involved in the mining and exploration of gold.

Many also choose to invest in financial instruments that base their performance on the forecasted value and changes in gold prices.

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According to Michelle Monk, Consumer Finance Expert at moneyfact.co.uk, gold has long been a lucrative investment endeavour for those looking to make money.

Ms Monk said: “Investing in gold is an important part of a larger investment portfolio, especially as a form of diversifying your types of investment.

“Gold has held its value for hundreds of years and because of this, is seen as a tangible asset into which your investment can be stored and preserved for future generations.

“Investment in gold often increases in value during difficult economic times and when there is a risk of higher inflation.

“This is because the value of gold is not usually correlated to the performance of other investments such as those connected to the performance of the stock market.

“For example, in July 2020 gold prices reached record levels as a response to growing economic uncertainties, while the value of the stock market had sharply declined.

“Gold also saw an increase after the 2008 financial crisis, while the stock market dropped in value.”

However, Ms Monk noted that investing in gold is not also guaranteed to make money due to its unregulated nature.

She explained: “While investing in gold is perceived as a place of safety during difficult economic times, there are no guarantees that its value will always increase.

“Investors need to be aware that investing in physical gold is an unregulated activity.

“This means there is no UK regulator that monitors those involved in the selling of physical gold as an investment.”

Anyone looking to invest in gold should take into consideration the market’s lack of regulation when doing so, as well as Mr Buffett’s warning of “no utility”.



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