Over the years, Buffett has disparaged gold as both a store of value and an investment
Sprott Inc. chief executive Peter Grosskopf has long fielded the same question while talking up gold to investors: Why does famed investor and multibillionaire Warren Buffett, the so-called Oracle of Omaha, hate the yellow metal? Grosskopf may never have to answer the question again.
On Friday afternoon, after years of trashing gold as an investment, Buffett’s Berkshire Hathaway Inc. revealed it had switched course and purchased 20.9 million shares in Toronto-headquartered Barrick Gold Corp. in a transaction worth an estimated US$563.5 million at the end of the second quarter.
“I think that now he seems to have come around to the fact that he can be comfortable with gold as a store of value,” said Grosskopf, whose company specializes in precious metals investment. “I think people are finally realizing it’s a legitimate part of a portfolio.”
Others seemed to quickly catch on: Barrick’s stock was up 11.3 per cent to $39.84 on Monday.
Barrick has been one of, if not the world’s largest gold producer for many years. In 2019, it produced 5.4 million ounces of gold, up from 4.5 million ounces in 2018.
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