If you dig deeper, Buffett is really saying that you can exchange your dollars for gold or you can exchange your dollars for a productive asset such as farmland or an operating business.
With the latter, you get some yield from the investment with which you can then buy more farmland or operating businesses and thus compound your capital. Snowball.
If you buy gold, it provides no income and instead you have to pay someone to store it for you so it, in essence, has a negative yield. Made perfect sense!
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