NEW YORK—The gold bugs have settled in Utah.

Populist fears about the Federal Reserve's loose money policy spurred Gov. Gary Herbert last week to sign a law that is already on the books. Utah now explicitly recognizes that gold and silver coins designated legal tender by the federal government are also legal tender in the state.

This redundant exercise in lawmaking aims to keep alive the debate over gold's role in the economy as rising costs for everyday goods hit household budgets. In television commercials and newspaper ads, gold is peddled as a safe investment that is shielded against inflation. Those that advocate for its broader acceptance and believe gold prices will continue to rise—in tandem with inflation—are known as "gold bugs."

When food and energy are excluded, price increases for goods and services have remained muted, although some worry that the rate of overall inflation could elude the Fed's control if the central bank doesn't soon rein in its hyper-accommodative monetary policy.

It is those inflation worries that have supported gold prices, now double what they were 2½ years ago.