You are gold! Always believe in your soul!
The Golden Cookie is an object that shows up on the screen in a random position during normal gameplay. It remains on the screen for 13 seconds, slowly fading into nothing. If it is clicked before fading away entirely, it will randomly grant the player either double cookie production ("frenzy") for 1 minute or an instant boost of cookies equal to 5% of the current cookies plus 13.
Once the golden cookie disappears, a new one will appear in 2-10 minutes.
Prior to Update 1.01, the Golden Cookie could rearrange the list of possible upgrades. Since only five upgrades were visibly available and purchasable at any given time in those versions, the Golden Cookie was a useful way to scramble the options and purchase an otherwise invisible upgrade.