Warren Buffett famously said on gold that “It has no utility. Anyone watching from Mars would be scratching their head.” The Oracle of Omaha was referring to the fact that the precious metal produces no cash flow and derives its value from basically what people are willing to pay for it. Well, it turns out, the gold bugs may have the last laugh on Buffett. At least when it comes to the gold miners.
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With prices for gold rising, the miners have started to see their cash flows surge. And in that, they’ve started handing out a hefty dose of variable dividends.
With gold prices expected to stay high for the rest of 2023 due to various geopolitical, economic, and inflationary reasons, the gold miners are setting themselves up for a good year. For dividend seekers, the sector could be a great place to find some inflation-protected income.
