Gold Bug

DEFINITION of 'Gold Bug'

An individual who is bullish on gold. Gold bugs believe that gold is still a stable source of wealth, like it was during the years of the gold standard international currency system. A gold bug invests in gold for what he or she perceives as financial security in the event of a currency devaluation, and often also believes that the price of gold will continue to rise in the future.


The term also refers to analysts who consistently recommend gold buys.

BREAKING DOWN 'Gold Bug'

Gold bugs view gold as a safe investment that will protect them 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 per ounce in the 1980s to less than $350 per ounce in the 1990s. This is a point frequently brought up by critics, who view gold as a standard of wealth from the past.

While there is no consensus, the market does continue to view gold as the traditional "safe harbor" during times of economic crisis. For example, following September 11, 2001, gold prices saw sharp increases as investors sold what they believed were riskier assets.

RELATED TERMS
  1. Short Gold ETF

    An exchange traded fund that seeks to profit from negative changes ...
  2. Gold Bull

    A slang term for a market or investor who is bullish on gold. ...
  3. Digital Gold Currency - DGC

    An electronic, private currency backed by gold bullion. Companies ...
  4. BUGS Index - HUI

    An acronym for "basket of un-hedged gold stocks". The BUGS index ...
  5. Gold Standard

    A monetary system in which a country's government allows its ...
  6. Reverse Gold ETF

    Exchange traded funds that are designed to trade in a direction ...
Related Articles
  1. Options & Futures

    Does It Still Pay To Invest In Gold?

    This asset's appeal dates back thousands of years. Find out whether it can live up to the hype.
  2. Options & Futures

    Why Gold Matters

    Gold is a very useful investment during periods of instability and high inflation.
  3. Mutual Funds & ETFs

    4 Ways You Can Invest In Gold Without Holding It

    Owning gold can be a store of value and a hedge against unexpected inflation. Holding physical gold, however, can be cumbersome and costly. Fortunately, there are several ways to own gold without ...
  4. Investing

    Why is Gold a Counter Cyclical Asset?

    Gold is widely considered a safe haven during market turbulence. History has proven gold performs counter cyclically to the state of the U.S. economy.
  5. ETF Center

    The Gold Showdown: ETFs Vs. Futures

    ETFs and gold futures are two ways to diversify into the metals asset class, but there are advantages and disadvantages to both instruments.
  6. Options & Futures

    Why Gold's Price is More than 'Supply and Demand'

    The price of gold is moved by a combination of factors. But the way they work together is sometimes counterintuitive.
  7. Economics

    The Effect of Fed Fund Rate Hikes on Gold

    Explore the historical relationship between interest rate increases and the price of gold, and consider what effect a fed funds rate hike might have on gold.
  8. Mutual Funds & ETFs

    The Relationship Between Gold and Gold ETFs

    Here's how the price of gold ETFs corresponds to the price of actual gold.
  9. Options & Futures

    Getting Into The Gold Market

    Add some sparkle to your portfolio by getting in on this classic commodity.
  10. Economics

    The Story Behind Gold's Mini-Flash Crash

    The gold market was rocked last week by a sudden drop in prices. There are a number of factors that can lead to a flash crash in any market.
RELATED FAQS
  1. What are the primary factors that drive prices in the gold industry?

    Find out about the factors that drive gold prices, such as interest rates, the stock market, demand and supply, and the value ... Read Answer >>
  2. What is the gold standard?

    The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold. With ... Read Answer >>
  3. How can I track gold prices?

    Learn how to track gold prices. Gold is a commodity traded as a physical asset and a futures contract. The one you track ... Read Answer >>
  4. What was the Gold Reserve Act?

    The Gold Reserve Act of 1934 gave the government the power to peg the value of the dollar to gold and adjust it as it pleased. ... Read Answer >>
  5. For investors, what are the alternatives to owning physical gold?

    Learn some of the primary alternate ways that someone can invest in the gold market besides simply purchasing physical gold ... Read Answer >>
  6. Has gold been a good investment over the long term?

    Examine the performance of gold as an investment, dating back to 1933, when President Roosevelt required all gold bullion, ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center