Warren Buffett, the “Oracle of Omaha” and chairman of Berkshire Hathaway (BRK.B) (BRK.A) has never minced words when it comes to his view on gold as an investment. He doesn’t think it’s a productive asset, and Buffett doesn’t invest in non-productive assets. He holds similar views on Bitcoin, which he called ‘probably rat poison squared’ in his 2018 shareholder letter. 

“[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,” Buffett reportedly said in a 1998 speech at Harvard. This encapsulates his skepticism about gold’s role in a productive investment portfolio.

The Philosophy Behind Buffett’s Gold Skepticism

Buffett’s core investment philosophy is rooted in the pursuit of assets that generate income and compound wealth over time. He divides investments into three categories: productive assets (like businesses and farmland), assets that rely on scarcity and demand (like gold), and currency-based assets. Gold, in his view, falls squarely in the second category—an asset that “will never produce anything” and whose value depends on the hope that someone else will pay more for it in the future.

Buffett has repeatedly argued that, unlike stocks or farmland, gold “has no utility” and does not create value. He famously compared the world’s gold stocks to a giant cube worth trillions of dollars, asking investors to imagine choosing between that inert cube and all the productive farmland or leading businesses in the U.S. — a choice he finds obvious in favor of productive assets.

Don’t Miss: 

• Move over Netflix & Disney: This Pre-IPO Startup Is Unlocking $2 Trillion in IP & Licensing Revenue
• Global Content Battles Are Brewing — And This Pre-IPO Studio Just Raised $3.1M to Enter the Fight

Gold’s Recent Performance and the Fear Trade

Despite Buffett’s criticism, gold has seen renewed interest in 2025, recently reaching record highs above $3,539 per ounce. This surge is driven by persistent inflation, geopolitical instability, and concerns about central bank and White House trade policies — factors that historically drive investors toward gold as a “safe haven.” Buffett himself has described gold as “a way of going long on fear,” noting that its price often rises when anxiety grips the markets.

However, Buffett’s warning remains relevant: gold’s value is largely psychological and dependent on the collective sentiment of fear. Once that fear subsides, gold’s lack of intrinsic productivity becomes a disadvantage compared to assets that generate cash flow or dividends.

Berkshire Hathaway’s Investment Approach: Productive Assets Over Speculation

Berkshire Hathaway’s portfolio reflects Buffett’s conviction in productive assets. The conglomerate’s major holdings include companies like Apple (AAPL), Coca-Cola (KO), and American Express (AXP) — firms with durable competitive advantages that generate consistent returns. Buffett’s approach is characterized by patience, value investing, and a focus on long-term wealth creation rather than short-term speculation.

Buffett’s critique of gold is especially timely in today’s volatile markets. As investors flock to gold amid uncertainty, his words serve as a reminder to focus on assets that create real value. The spectacle of “digging gold out of the ground just to bury it again” is, in Buffett’s eyes, an unproductive exercise — one that may puzzle any rational observer, Martian or otherwise.

For those seeking long-term financial security, Buffett’s advice is clear: invest in businesses and assets that work for you, rather than relying on the shifting sands of sentiment and fear.