Old buddy is a gem (4)
I believe the answer is:
opal
'a gem' is the definition.
(opal is a kind of gem)
'old buddy' is the wordplay.
'old' becomes 'o' (common abbreviation eg in OE for Old English).
'buddy' becomes 'pal' ('pal' can be a synonym of 'buddy').
'o'+'pal'='OPAL'
'is' is the link.
(Other definitions for opal that I've seen before include "Opaque gem" , "Milky iridescent stone" , "Something milky-white" , "precious jewel" , "Semiprecious stone of white and bluish colour" .)