The precious metals market has witnessed sharp corrections in gold prices, causing considerable anxiety among individual investors.
Amidst the global financial landscape's search for safe havens, the international financial community has unexpectedly revisited a classic investment record of "the Oracle of Omaha," Warren Buffett. An interesting fact that few people notice: Despite his reputation for disliking gold, Buffett was once a serious silver trader.
This story is not just a past anecdote, but is becoming a valuable "guide" for the financial landscape of 2026, when technology and clean energy will reign supreme.
Warren Buffett surprises with his preference for investing in silver, not gold (Illustration: AI/ Metals Edge).
The counter-trend philosophy of the investment legend.
Warren Buffett has never hidden his apathy towards gold. On CNBC's Squawk Box in 2011, he frankly called gold "a long-term bet on fear."
Buffett's argument is incredibly sharp and highly pragmatic: You make money from gold when people are afraid, but when the fear subsides, you lose money. Gold itself, according to him, has two fatal weaknesses: it has virtually no essential uses and it has absolutely no ability to grow or multiply. A gold bar bought today will remain just a gold bar ten years from now, sitting idle and "staring at you" without generating any surplus value.
However, with silver, the story is entirely different. According to Investopedia and archives from Berkshire Hathaway, Buffett views silver through the lens of a true value investor. If gold is a psychological asset, then silver is a functional asset.
In Buffett's thinking, a worthwhile investment must meet a real need of life or production. Silver perfectly satisfies this criterion.
It's not just a precious metal for storage; it's the "backbone" of healthcare (antibacterial, water purification) and the best electrical conductor in the electronics world. From life-saving medical devices to microchips in iPhones, computers, and solar panels, silver plays an irreplaceable role. This very usefulness convinced Buffett to invest in it, something gold could never do.
When the "prophet" amassed a quarter of global silver production.
The history of global finance was shaken in 1998 when Berkshire Hathaway revealed in a press release that it owned 129.71 million ounces of silver. This investment had been quietly accumulated from July 1997 to early 1998.
To give readers a better understanding of the enormous scale of this deal: The amount of silver Buffett held at the time was equivalent to about 25% of the total global silver mining output each year. The Wall Street Journal at the time valued this "treasure trove" at nearly $1 billion. Although this figure represented less than 2% of Berkshire's investment portfolio, it was enough to shake the Comex market and cause managers to worry about a price manipulation scenario similar to that of the Hunt brothers in the 1970s.
But Buffett isn't speculating. He sees an imbalance between supply and demand. In the 1990s, he realized silver inventories were plummeting while industrial demand remained high. He and his "right-hand man," Charlie Munger, concluded that equilibrium could only be re-established at a higher price. And they were right.
Although Buffett later admitted to "selling too early" less than a decade ago, if calculated at market prices on January 31, 2026, when silver was trading around $100 per ounce (according to data from Barron's), that investment would be worth approximately $13 billion today. A colossal figure that demonstrates his foresight.
Berkshire Hathaway chairman Warren Buffett was an early researcher of the silver market. The conglomerate made a significant investment in silver during 1997-1998, when the metal was priced at only around $5 per ounce (Photo: The Motley Fool).
The future of silver prices
Why is the story from 30 years ago so relevant in 2026? Because history is repeating itself, but on a much larger scale and with greater urgency.
According to the World Silver Survey and data from Equiti Group, the current silver market is operating exactly as Buffett once favored: a structural supply shortage. We are entering the fifth consecutive year that the world is consuming more silver than it is mining.
While silver was once primarily used in films and household goods, by 2026 it will be the "heart" of three major revolutions: solar energy, electric vehicles (EVs), and artificial intelligence (AI).
Solar energy: Expected consumption of 120-125 million ounces this year.
Electric vehicles: Approximately 70-75 million ounces are needed for complex electrical circuit systems.
AI data centers: 15-20 million ounces are needed to power high-performance grid systems and servers.
Both Peel Hunt brokerage and GoldBroker agree that silver has escaped its image as "the poor man's gold" to become a "strategic metal." Looking at the projected supply deficit (almost 100 million ounces by 2025), it's clear that silver possesses "real use value," something Buffett has always sought, while gold remains merely a safe haven for fearful money.
Lesson for individual investors: Don't copy, think for yourself.
From the perspective of a financial market journalist, Buffett's preference for silver over gold doesn't mean individual investors should sell all their gold and go all-in on silver tomorrow. The lesson here lies in asset allocation thinking.
According to analysts, in the context of 2026, investors should re-evaluate their portfolios using the "Buffett filter".
First, consider gold for what it truly is: a form of insurance. Holding a small proportion of gold to hedge against volatility is reasonable, but don't expect it to be a "retirement machine" generating phenomenal growth.
Secondly, consider silver as a satellite growth investment. Silver currently possesses both the inflation-hedging properties of a precious metal and directly benefits from the booming green economy and high technology. However, it's important to remember that silver is highly leveraged and subject to significant volatility. Even Buffett allocates less than 2% of his assets to silver.
No need to follow Buffett's lead, just borrow his thinking: in 2026, silver will be tied to real use value, while gold will primarily reflect fear (Image: IG).
Ultimately, the core of investing remains intrinsic value. Buffett's immense success isn't due to trading metals, but rather to investing in businesses that generate consistent cash flow. Silver or gold, after all, are just pieces of the puzzle for diversification.
Charlie Munger once admired Buffett at the 1998 Annual Meeting: "Just think how much discipline it takes to follow an idea for three or four decades, only to wait for the moment to use 2% of your assets." That's the most valuable message: Patiently wait for the opportunity when value and price meet, instead of chasing the crowd in speculative bubbles.
Source: https://dantri.com.vn/kinh-doanh/vi-sao-warren-buffett-thich-bac-hon-vang-20260201000219252.htm
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