Warren Buffett's surprising investing preference: silver, not gold

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Gold is “a way of going long on fear,” Warren Buffett said in a 2011 appearance on CNBC’s “Squawk Box.” He added that if people become more afraid, you make money, and if they become less afraid, you lose money, because “the gold itself doesn’t produce anything.”

In his 2011 Berkshire Hathaway shareholder letter, he described gold as having “two significant shortcomings, being neither of much use nor procreative.”

Investopedia reminded readers of that language again in December 2025, pointing out that Buffett has “consistently criticized gold as an investment choice” for lacking cash flow and practical utility, as Investopedia highlighted late last year.

When I look at my own portfolio through that lens, I treat gold as insurance, not as a long-term compounder. I’m not expecting it to do the job of a stock or a business.

Buffett prefers silver to gold.Shutterstock · Shutterstock

Buffett’s record in silver shows you what he does like.

Berkshire Hathaway disclosed in a February 1998 press release that it owned 129,710,000 ounces of silver, with purchases starting on July 25, 1997, and ending on January 12, 1998. The company said that even though the stake was huge in ounces, it represented “less than 2%” of Berkshire’s investment portfolio at the time.

Berkshire’s total purchases reached 129.7 million ounces after an initial 111.2 million ounces in 1997, with The Wall Street Journal valuing the hoard near 1 billion dollars as silver prices climbed in early 1998, according to Metalmarket.eu’s report.

Berkshire’s silver holding “amounted to roughly 25% of the world’s annual production” when it was built, and Buffett eventually told shareholders “I sold too soon” after unloading the position within about a decade, Barron’s reported in January 2026.

To me, that’s a huge tell.

He would not touch gold for decades, but he was willing to own a quarter of yearly silver output when the price and fundamentals looked wrong.

The current silver market makes Buffett’s decision look less like a one-off and more like a blueprint.

Silver has entered its fifth straight year of structural deficit, with cumulative shortfalls since 2021 approaching the equivalent of a full year of global mine output, according to a 2025 summary of the Silver Institute’s World Silver Survey.

Industrial demand reached about 680 million ounces in 2024 and is expected to remain near record levels through 2026, anchored by solar, EVs, grid upgrades, and data‑center build‑outs, according to an analysis from Equiti Group.

Solar alone could require 120 to 125 million ounces of silver in 2026, with EVs adding roughly 70 to 75 million ounces and grid and data‑center projects contributing another 15 to 20 million ounces.

Full‑year 2026 silver price forecasts have already moved higher, with the target raised to $75 an ounce on the back of “supply deficits and industrial demand,” brokerage Peel Hunt told MiningWeekly in a January 2026 note.

Silver is “the return of a strategic metal,” with a 2025 production deficit expected to reach nearly 95 million ounces and ETF flows threatening to widen the effective gap toward 300 million ounces, GoldBroker’s 2026 outlook argued.

When I look at those numbers, I don’t see “poor man’s gold” anymore. I see a metal that has quietly become a critical input for solar, AI‑driven data centers, EVs, and the power infrastructure that keeps all of that running.

That lines up a lot more closely with the kind of real‑world utility Buffett has always said he wants from the assets he owns, as his comments on gold in shareholder letters and interviews make clear.

Buffett has not softened his stance on gold, even as prices hit records.

He views gold as a non-productive asset where returns depend on sentiment rather than on earnings or dividends, InvestingNews Network summarized in a 2025 piece on his metals comments.

He prefers “investments that yield cash flow and appreciate over time,” and contrasted that preference with gold’s lack of income or organic growth, a December 2025 story on the gold surge noted, according to Investopedia.

For me, that shapes how I use gold day to day.

I keep any gold position small and treat it like a volatility hedge, not a retirement engine.
When I add new money, I prefer stocks, funds, or even certain metals plays that clearly tie back to cash flow or real-world demand.

I still see a role for gold, but I don’t expect it to do something it was never built to do.

Silver is trickier, and I think that’s where you have some room to apply Buffett’s logic rather than copy his trades.

Industrial uses made up 59% of silver demand in 2025, with photovoltaic solar, automotive, and electronics leading the way, Nasdaq’s 2025 mid‑year silver outlook said.

Global industrial silver demand “is soaking up nearly all of the silver on the planet,” with the total market deficit nearing 1 billion ounces over five years, Katusa Research said. Silver is “the quiet backbone of the biggest revolutions in energy, technology, and defense,” and mining output “can’t keep up” with this new wave of demand, a separate Katusa Research note on “silent surge assets” argued.

For you and me, that translates into a different playbook than gold offers.

Silver can hedge inflation and currency risk, but it also leans into growth in solar, EVs, and electrification.
Silver miners and related ETFs can give you leverage, but they swing harder than bullion and live or die on project quality and cost discipline.
Sizing matters; even Buffett kept his historical silver stake under 2% of Berkshire’s assets, according to the 1998 press release.

I think of silver as a targeted satellite position that might deserve a bit more attention in 2026 than it did a decade ago, especially if most of your “precious metals” allocation is just gold.

Buffett has already told you what he values, both in his letters and in his trades.

He has called gold “neither of much use nor procreative” and a simple bet on fear, repeating that view in interviews and shareholder communication for more than a decade.

He once bought 129.7 million ounces of silver, enough to shake the Comex market and represent about a quarter of annual world production, according to Barron’s and Berkshire’s own disclosures.

Research in 2025 and early 2026 from metals analysts sketches a world where silver’s role in solar, EVs, and high-end electronics is growing while supply struggles to keep up.

If I were rebalancing today, here is how I’d let that guide me.

I’d keep gold as a modest insurance policy, recognizing that its job is to stabilize, not to grow.
I’d consider a measured allocation to silver or silver‑linked funds if I want exposure to decarbonization and electrification without betting everything on a single clean‑energy stock.
Above all, I’d still put most of my long‑term money into productive assets, which is where Buffett has actually made his fortune.

You don’t need to agree with Buffett on every point to borrow his filter.

In 2026, with gold near records and silver tied ever more tightly to how the modern economy runs, that filter pushes you toward assets with clear utility and away from metals that only move when everyone else is scared.

This story was originally published by TheStreet on Jan 31, 2026, where it first appeared in the Economy section. Add TheStreet as a Preferred Source by clicking here.