Gold has zero intrinsic value. Like all forms of money, its value is a psychological and sociological construct to treat it as if it had value.
The Incas for example simply used it for religious and ornamental purposes:
* https://www.tourinperu.com/blog/inca-gold-culture-invasion-r...
Anything can be used as money, including giant rocks:
There's a reason people buy gold. 1kg of Argentinian gold has the same value as 1kg of American gold. And both have the same value as 1kg of gold from any ancient civilization. Big rocks as currency is purely anecdotic.
Of course, if you're in the desert and you're thirsty, a bottle of water has more value to you than all the gold in the world, but that doesn't change the fact that through millennia people has seen gold as something valuable that it's not tied to an economy, a country, an empire or even a culture despite de Incas.
Papers have been written on how it does not:
* https://www.nber.org/papers/w18706
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789
See also Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976 on how it's no good against infaltion:
> Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning.
* PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
* https://www.pwlcapital.com/will-gold-save-the-day/
Having gold as one's monetary base (e.g. Gold Standard) doesn't even help in stabilizing currencies:
* https://www.theatlantic.com/business/archive/2012/08/why-the...
> Big rocks as currency is purely anecdotic.
Big rocks as currency is one example of how any arbitrary object can be treated as such:
* https://americanhistory.si.edu/the-value-of-money/origins-mo...
Gold (or silver) bars and coins are nothing more than shiny rocks and are just as arbitrary.
Modern society needed something scarce and was hard to manufacture/process (thus ensuring price stability) to use as an intermediate currency between currencies. Those countries agreed to use gold as this intermediate currency. Other ideas have been to use groups of commodities but these incur more complexity since they're purpose is to be consumed in some process.
So does this not give gold an intrinsic value? Economists regard it as a "shiny rock" but I think that is an oversimplification used to make opponents of fiat money look stupid.
And now we have no intermediary and no one bothers with gold when going between USD and EUR or JPY and CAD. Gold is completely useless for such exchanges in 2023 and would just add overhead. So given that it is worse than useless (being an hinderance due to an extra step) in such transactions, how can it have "intrinsic" value? If you're travelling internationally, do you exchange your domestic currency for gold, cross the border, and then exchange the gold for the destination currency?
What exactly is gold useful for in 2023 besides jewelry and some minor industrial uses? Can you buy groceries? Pay property taxes? Can you show up at a car dealership with a brick or two and get a new ride?
What is the value of me having gold in my possession?
> Those countries agreed to use gold as this intermediate currency.
It was socially agreed to it having value, but if it had "intrinsic" value, (a) no such agreement would have been needed because it would have been self-evident (the Gold Standard was only formalized in 1870), and (b) it would still be valid today. When the agreement stopped the intermediary status also stopped, showing there was nothing "intrinsic" about it: it just happened to be a convenient convention (for a time).
The Spanish price revolution crippled the Spanish state due to the huge inflation driven by New World treasure fleets. Gold is nothing special here.
