Before we dive deeper into why Warren Buffett doesn't invest in gold, it's important to analyze how Buffett thinks about investments. Therefore, Warren Buffett doesn't invest in gold. However, that doesn't mean that gold and other precious metals don't have a legitimate purpose in an entire portfolio. If you take a look at Berkshire's investment portfolio, you'll find many subsidiary companies and stock investments, but gold is nowhere to be found.
Here's a brief summary of Warren Buffett's investment style, as well as his view on gold in particular, which should help give you a clear idea of why you shouldn't expect to see gold bars in Berkshire's investment portfolio anytime soon. You can still own physical gold directly, but now many investors own gold through exchange-traded funds. One of Buffett's basic investment principles is that you should only invest in things that are useful, that have some purpose and that entail some practical need that people have. Suffice it to say that the same would not have happened if Buffett had simply invested Berkshire's capital in gold after taking over the reins of the company.
The explanation for Buffett's aversion to gold and his enthusiasm for silver is due to his basic principles of investing in securities. However, there is nothing wrong with investing a small portion of your portfolio in gold or other precious metals to protect against inflation and increase diversification. The point is that Warren Buffett invests Berkshire Hathaway's capital in productive assets and foreign-denominated investments while waiting to find more productive assets to buy. The bottom line is that most of your portfolio should be invested in productive assets, with some cash and equivalents as reserve, waiting to take advantage of attractive investment opportunities in other productive assets that arise.