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| Money Metals News Alert | May 27th, 2025 – Gold and silver prices surged higher last week on renewed interest in safe havens. The renewed threat of tariffs on imports from Europe and spiking bond yields made investors nervous.
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The S&P 500 lost roughly 2% for the week but is showing strength today.
The 10-year Treasury ended back above 4.5% yield for the first time since February.
Meanwhile, the U.S. dollar as measured on the DXY index was clobbered from just over 101 to just under 99 by Friday's close.
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It was quiet in the bullion markets however. Higher prices did little to stimulate interest from speculators. There was a little profit-taking from long-time holders inclined to sell.
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 | Gold : Silver Ratio (as of Friday's closing prices) – 100 to 1 | | |
| Warren Buffett's Gold Blind Spot | | | |
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The Oracle of Omaha, Warren Buffett, recently announced he will be stepping down as CEO of Berkshire Hathaway. He built a reputation as one of the sharpest minds in investing.
Buffett's folksy wisdom and knack for picking winners made him a household name. But when it comes to gold, Buffett maintains a stubborn bias against investing, and he's missed an absolutely huge move over the past 25 years.
Just before a generational bull market began in 2000, Buffet delivered a famous quip during a 1998 speech at Harvard summing up his disdain: | "[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." | At the time, it was a reasonable perspective. Gold had been floundering for nearly 20 years since the last bull market ended in 1980.
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It looks silly today.
Buffett has turned more bearish on stocks given the sky high valuations and a mixed economic outlook. He has also shared strong concerns about the U.S. dollar.
Buffett has even been vocal about dumping dollars in favor of other fiat currencies such as the Japanese yen. Yet he has shown no interest in gold.
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That's odd. Gold has already enjoyed an extraordinary run over the past 25 years, driven by many of the same concerns Buffett has now.
The Fed went berserk with bailouts, zero interest rates, and massive money creation. Federal debt has literally gone parabolic, and Congress still shows no inclination to rein that in. Japan and other developed nations appear just as irresponsible. Gold has performed even better relative to the yen.
The whole world is mired in an inflationary spiral. Despite that, Buffett has yet to acknowledge the utility of gold. | | |
| Gold's Quiet Triumph Over the S&P 500 | | |
Gold's results ought to be hard to miss or ignore.
Since 2000, gold has delivered a compounded annual growth rate (CAGR) of roughly 8.7%, climbing from around $280 per ounce to over $2,600 by May 2025.
Compare that to the S&P 500, which, including dividends, has posted a CAGR of about 6.5% over the same period. In raw terms, gold has surged over 800%, while the S&P 500, even with reinvested dividends, has gained around 400%.
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Think about that. The "useless" metal has more than doubled the returns of U.S. stocks. Importantly, the metal did better during turbulent times -- the dot-com bust, the 2008 financial crisis, and the COVID market panic.
The stimulus-addicted equity markets look like a bubble, with record PE valuations. Gold, on the other hand, has proven its mettle as a safe haven. In 2008 alone, while the S&P 500 cratered 38%, gold gained over 4%.
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It's not just about price appreciation. Gold's low correlation with stocks – recently at its lowest in decade – makes it a powerful diversifier. When markets tank, gold often holds or climbs, cushioning portfolios.
Gold has worked great as an investment, an inflation hedge, and as a safe haven for 25 years. That is a ton of utility.
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| Gold vs. Berkshire Hathaway | | |
Gold hasn't just fared well versus the broad S&P 500 index. It also stacks up against Buffett's own Berkshire Hathaway…
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| This week's Market Update was authored by Money Metals Director Clint Siegner. | | |
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