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.

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