Buffett bets on Barrick to reverse previous gold position

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Warren Buffett’s Berkshire Hathaway Inc. added Barrick Gold Corp. to its portfolio in the second quarter, pushing up shares of the world’s second-largest metal miner.Berkshire has taken a new position in Barrick, purchasing 20.9 million shares, or 1.2% of the company’s outstanding shares, with a current market value of US $ 565 million, according to a published regulatory filing Friday. The file shows the movements of Buffett or his two investment assistants, Todd Combs or Ted Weschler.

Big miners, including Barrick and Newmont Corp., were hoping to win over generalist investors who fled the industry years ago. In the past, Buffett, the billionaire president of Berkshire, has warned against investing in the metal because it is not productive like a farm or a business. Today, gold producers are profiting from the surge in bullion prices over the past year, increasing profit margins as production costs have stabilized.

Paulson & Co., led by billionaire hedge fund manager John Paulson, also added to its stakes in Barrick.

Barrick shares were up 7.4 percent at 5:32 p.m. after hours in New York.

Rising gold prices have boosted investors’ willingness to inject billions into the industry, with precious metal miners raising US $ 2.4 billion in secondary stocks in the second quarter. Gold was boosted by the Federal Reserve’s interest rate cuts and falling real yields on government bonds increased demand for the metal, which offers no interest.

Deposits released this month do not include the current position of hedge funds, which may have changed since the end of the quarter. Fund managers who oversee more than US $ 100 million in the United States must file a Form 13F within 45 days of the end of each quarter to list these stocks as well as options and convertible bonds. Deposits do not show non-US securities, unlisted securities, or cash.



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