Rally not over, gold a 'buy': JPM analyst

Despite a rally of 6 percent from June lows, gold has higher to go over the next few weeks, JPMorgan analyst John Bridges said Monday.

"We feel that there's at least a technical bounce here," he said, adding that it was also a hedge against an economic decline. "If you're still uncertain about whether the financial crisis is truly over, then having some gold in the portfolio makes a lot of sense."

On CNBC's "Fast Money," Bridges noted strong demand for physical gold in China and India.

"That comes back to one of the key attractions of gold. It is a currency which is nobody else's liability," he said. "And so, if you have a situation where you're scared about where your currency is going, you want to buy gold. And if you're scared enough, you don't care what you pay."

(Read more: 'I would own physical gold': Marc Faber)

Bridges said that anecdotally he had heard that gold buyers were first asked whether they wanted to buy gold stocks.

"No, they wanted to buy bricks, and some of them wanted the bricks delivered to their houses. That's how scared they got," he said. "I suspect you have a similar situation in India."

Bridges also added how he saw gold as an asset class.

"Gold is not an investment. Gold is a wealth-protection device," he said. "Gold does not increase in value over the long term. It holds its value over the very, very long term."

(Read more: Gold 'ridiculously oversold': Fund manager)

Bridges listed Newmont among his holdings and said that he had recently had taken new positions in Eldorado and New Gold.

"Goldcorp is also one of the stronger companies with one of the stronger balance sheets," he added.

Last week, Bridges noted that the gold market had "shrugged off" the move by John Paulson to reduce his gold holdings.

(Read more: Time to move into cash, strategist says)

On "Fast Money," he said that the comment had elicited "intriguing" reactions.

"I think there's a sort of sensitivity to the idea that gold is making some sort of base at the moment," Bridges said. "It's something of an insider's joke that at the time of the Denver gold show at the end of September, gold often makes at least a near-term peak."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On Aug. 19, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long EBAY; Stephen Weiss is long BAC; Stephen Weiss is long AIG; Stephen Weiss is long C; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long BBRY; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Pete Najarian is long KWK; Pete Najarian is long NRF; Pete Najarian is long GGB; Pete Najarian is long SUNE; Michael Murphy is long BAC; Michael Murphy is long C; Michael Murphy is long INTC; Michael Murphy is long MSFT; John Bridges is long GG; John Bridges is long EGO; John Bridges is long NEM.