Buffett's Silver Play: Why the Oracle of Omaha Shuns Gold but Once Bet Big on the 'Strategic Metal'

Warren Buffett has never minced words about gold. In a 2011 CNBC appearance, the Berkshire Hathaway chairman called the yellow metal "a way of going long on fear," an asset that produces nothing and whose value hinges solely on sentiment. That stance, reiterated for over a decade, stands in stark contrast to a lesser-known but massive bet he placed on another precious metal: silver.

In February 1998, Berkshire Hathaway disclosed it had amassed 129.7 million ounces of silver over the preceding six months—a hoard so large it represented roughly a quarter of the world's annual production at the time. While Buffett later admitted he "sold too soon," the scale of the move was a clear signal. "He wouldn't touch gold, but he was willing to own a quarter of yearly silver output when the price and fundamentals looked right," notes Michael Thorne, a veteran commodity strategist at Veritas Analytics. "That's not a coincidence; it's a thesis."

That thesis—favoring assets with practical utility and cash-flow potential—is gaining fresh resonance. According to the Silver Institute's 2025 survey, the silver market is in its fifth consecutive year of structural deficit, with cumulative shortfalls since 2021 nearing a full year of global mine output. Driving this shortfall is explosive industrial demand, projected to consume about 680 million ounces in 2024 and remain at record levels through 2026.

"Solar photovoltaics, electric vehicles, power-grid upgrades, and AI data centers are creating a new demand paradigm," explains Dr. Lena Chen, a materials economist at the Global Resources Institute. "Silver is no longer just 'poor man's gold'; it's a critical industrial input. We estimate solar alone could demand 120–125 million ounces by 2026."

This fundamental shift has analysts revising forecasts. In January 2026, brokerage Peel Hunt raised its full-year silver price target to $75 an ounce, citing persistent supply deficits and robust industrial offtake. Katusa Research warns the total market deficit could approach 1 billion ounces over five years, calling silver "the quiet backbone of the biggest revolutions in energy, technology, and defense."

Buffett's own framework makes sense of this divergence. He has consistently criticized gold as being "neither of much use nor procreative," preferring investments that generate earnings. Silver, with nearly 60% of its demand now industrial, aligns more closely with his philosophy of value derived from utility.

"This is classic Buffett," says retail investor David Park, who has followed Berkshire for 15 years. "He avoids assets whose worth depends on the next person's fear. Silver has a job to do in the real economy—that's what he bought into."

Not everyone views the distinction so charitably. "It's hypocritical," argues financial blogger and podcast host Marcus Frye, known for his bullish gold stance. "He mocks gold as 'going long on fear,' but his silver bet was a pure commodity speculation on scarcity. He just happened to pick a metal that later found industrial tailwinds. Call it luck, not genius."

For investors, the takeaway may be less about copying Buffett's trades and more about applying his filter. In a 2026 landscape where gold prices test records and silver becomes increasingly tied to green-energy and tech infrastructure, that filter emphasizes tangible utility over mere sentiment.

This analysis was adapted from a report originally published by TheStreet on January 31, 2026.