Here Come the Institutional Investors—How This Shift Could Overwhelm the Gold Industry

Editor’s Note: It wasn’t just Warren Buffett’s company buying $565 million worth of Barrick Gold last quarter. That was the big headline, but institutional investors buying gold last quarter was more widespread than just Berkshire Hathaway’s purchase. And it’s just getting started. The research below shows just how much cash could flood into the gold industry.      

It blew up my phone. It was after market hours on Friday, August 14 when the news broke that Berkshire Hathaway’s 13F showed it had purchased 20.9 million shares of Barrick Gold, the largest gold miner in the industry.

It caught many gold investors by surprise, myself included, since Buffet has been so negative on gold—even though he bought a miner one wouldn’t do that if they thought gold was headed lower anytime soon.

But as it turned out, the bombardment on my phone about Buffett’s Big Buy was just the tip of the golden iceberg; he was not alone. This is significant, because by all appearances the shift into gold (and silver) by institutional investors has only just begun—they don’t typically take large positions for just one quarter, but invest in what they believe is a trend.

 
Gold Coins by Robin Design Services is licensed under Public Domain Mark 1.0
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