Gold Bug

AAA

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.

INVESTOPEDIA EXPLAINS '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. Bullion Coins

    Coins made from precious metals that are generally used for investment ...
  2. Bullion Market

    A forum through which buyers and sellers trade pure gold and ...
  3. Precious Metals

    A classification of metals that are considered to be rare and/or ...
  4. Fool's Gold

    Also known as iron pyrite, fool's gold is a gold-colored mineral ...
  5. Gold Standard

    A monetary system in which a country's government allows its ...
  6. Bretton Woods Agreement

    A landmark system for monetary and exchange rate management established ...
RELATED FAQS
  1. What are the requirements for being a Public Limited Company?

    The requirements for an entity to be considered a public limited company (PLC) include registration requirements, establishing ... Read Full Answer >>
  2. How do I place an order to buy or sell shares?

    It is easy to get started buying and selling stocks, especially with the advancements in online trading since the turn of ... Read Full Answer >>
  3. Is there a difference between financial spread betting and arbitrage?

    Financial spread betting is a type of speculation that involves a highly leveraged derivative product, whereas arbitrage ... Read Full Answer >>
  4. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>
  5. When does the holding period on a stock dividend start?

    The holding period on a stock dividend typically begins the day after it is purchased. Understanding the holding period is ... Read Full Answer >>
  6. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
Related Articles
  1. Economics

    What Is Wrong With Gold?

    Despite its historic and symbolic appeal, this metal is simply a commodity. Here we explore its meaning as an investment.
  2. Investing Basics

    Precious Metals Funds: A Golden Opportunity?

    Used intelligently, precious metals can help an investor obtain decent returns in a terrible market.
  3. Economics

    8 Reasons To Own Gold

    This precious metal's rich history stems from its ability to maintain value over the long term.
  4. Investing

    A Holistic Approach To Trading Gold

    Combine technicals and fundamentals to tune out noise and confirm trends in this commodity.
  5. Budgeting

    The Gold Standard Revisited

    Think the value of gold is unshakable? Read this chronicle of its rise and fall.
  6. Economics

    What Is Money?

    It's a part of everyone's life, and we all want it, but do you know how it gains value and how it is created?
  7. Investing

    Using Technical Analysis In The Gold Markets

    The quest for this shiny commodity has made millionaires of paupers and, on the flip side, ruined many an investor.
  8. Options & Futures

    Trading The Gold-Silver Ratio

    This method may seem arcane, but many well-established strategies rely on it.
  9. Mutual Funds & ETFs

    The Midas Touch For Gold Investors

    Find some golden opportunities by investing in gold commodities or futures contracts.
  10. Options & Futures

    How to Make Money by Trading Index Options

    Index options are less volatile and more liquid than regular options. Understand how to trade index options with this simple introduction.

You May Also Like

Hot Definitions
  1. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  2. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  3. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  4. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  5. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  6. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!