gold bug

Gold Bug

A person who believes that gold is still a stable source of wealth like it was during the years of the gold standard international currency system. Gold bugs invest in gold for financial security it provides in the event of a stock market crash or currency devaluation. The term also refers to analysts who consistently recommend gold buys.

Investopedia Commentary

Gold bugs view gold as safe an investment to protect from currency fluctuations or downturns in the financial markets. Although gold is widely known as a standard of value, its price - like that of any other precious metal or commodity - fluctuates widely. For example, the price of gold declined from more than $800/oz in the 1980s to less than $350/oz in the 1990s.

However, while there is no consensus, on average the market continues to view gold as the traditional "safe harbor" during times of economic crisis. For example, following the unfortunate events of September 11th, 2001, gold prices saw sharp increases as investors sold more risky assets and flocked to the gold "safe harbor".

Related Links

The Gold Standard Revisited
Using Technical Analysis in the Gold Markets
What Is Money?

See also: Bretton Woods Agreement, Bullion, Devaluation, Fool's Gold, Gold Standard, Precious Metals, Silver

gold bug

An individual who thinks that investors should keep all or part of their assets in the form of gold. The tendency to recommend gold nearly always stems from the gold bug's expectation of rapid or uncontrolled growth of the money supply accompanied by high rates of inflation. Some gold bugs also predict economic collapse with gold becoming the standard of payment.