Buffett Shocks Wall Street With Purchase of Gold Producer Barrick Gold (GOLD)

Warren Buffett's Berkshire Hathaway shocked Wall Street after the close Friday by disclosing a nearly 21 million share stake in gold producer Barrick Gold (NASDAQ: GOLD). The stake is worth approx $565 million, based on Friday's closing price.

Buffett has been critical of gold over his career. As recently as his 2018 annual letter, Buffett said:

Those who regularly preach doom because of government budget deficits (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400-fold during the last of my 77-year periods. That’s 40,000%! Suppose you had foreseen this increase and panicked at the prospect of runaway deficits and a worthless currency. To “protect” yourself, you might have eschewed stocks and opted instead to buy 31⁄4 ounces of gold with your $114.75.

And what would that supposed protection have delivered? You would now have an asset worth about $4,200, less than 1% of what would have been realized from a simple unmanaged investment in American business. The magical metal was no match for the American mettle.

It is unclear if Mr. Buffett pulled the trigger on the Barrick Gold purchase, or if it was one of his lieutenants. However, one thing is clear, with all the Federal Reserve money printing, someone at the firm sees value in the precious metal.

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