"showy, tastelessly rich," 1580s, probably ultimately from Middle English gaudi "large, ornamental bead in a rosary" (early 14c.); but there is a parallel sense of gaudy as "full of trickery" (1520s), from Middle English gaud "deception, trick," from gaudi "a jest, trick," possibly from Anglo-French gaudir "be merry, scoff," from Latin gaudere "rejoice" (see joy).
Alternative etymology of the adjective is from Middle English gaudegrene "yellowish-green" (early 14c.), originally "green dye" obtained from a plant formerly known as weld, from a Germanic source (see weld (n.)), which became gaude in Old French. The English term supposedly shifted sense from "weld-dye" to "bright." As a noun, "feast, festival" 1650s, from gaudy day "day of rejoicing" (1560s).