You can't eat it, drink it, drive it, or live in it. While you can wear some as jewelry, it won't keep you warm. It does not earn interest. It is not really good for anything that is necessary. Metal coins and paper money are merely tradable symbols for the efforts and possessions of humans. It is only people's attitudes and beliefs about these symbols that make them valuable. The only real basis for gold's value is the labor, machinery, and energy needed to find, extract, form and get it to market. That is difficult and therein lies it benefit and problem for economics.
Let's look at what happens in a pure gold currency economy. To make it simple, suppose that an economy has only 1,000 ounces of gold. Each person has a balanced budget, that is, each spends all of his income on what he needs and wants. The 1000 ounces of gold goes around and around: the shoemaker buys from the baker, the baker buys from the farmer, the farmer buys from the tailor, who buys from the shoemaker, etc. If one of the society's members decides he wants to produce something new, there is no extra gold in the economy to invest in it. If one person has a new baby, there is no extra gold to buy anything for it. Since everyone is earning and buying what he or she needs and wants already, that person will have to give up something to invest or buy this new item or not do it all. If one of the members decides not to buy something, then this flows throughout the society and many of the other members cannot buy something since that gold no longer goes around (see Paradox of Thrift by Keynes). With an economy based on gold, you either have to conquer someone and take their gold, or go prospecting; not timely or likely and getting harder to do all the time. As a result, all ancient and most non-fiat money economies stagnated or collapsed when their source of new gold ran out, was horded, or saved. Gold is an unthinking and intractable economic master which has historically caused stagnation and war.
Humankind's ability to produce goods and services is limited only by our minds. With paper and electronic money (fiat money), a wise government expands the money supply in step with new production, services, and population growth so people can buy the newly produced items they want and need. Gold is limited by nature and technological innovation. The supply of gold cannot automatically, seamlessly expand when needed to fund new human ideas and production, to fund the needs of an expanding population. The world got lucky with the influx of the New World's gold and the California strike which stimulated stagnating economies.
You often hear from people, particularly those who own lots of it (gold bugs), "Gold is the only "real' money." That is definitionally false. "Real" is anything that has actually occurred or existed. Sea shells, arrowheads, salt, animal hides, butter, cacao beans, tobacco leaves, barley, beads, the giant stone wheels of the south Pacific, many things, were "real" money since people actually used it to exchange goods, services, and property. What these gold salesmen are really saying is three things: 1) Gold does not deteriorate or waste away like barley, wood, iron, etc. 2) The government can print as much paper money as it wants, thereby enriching it while diluting the value of money already in the hands of others. 3) Gold is so rare that it is hard to increase the amount of it in circulation, so it is hard to dilute the value of it. But gold, silver, diamonds, etc. are commodities subject to the laws of supply and demand. They have no immutable or innate value.
Gold inflation and bubbles have happened before. The discovery of the New World's gold flooded the market, resulting in crippling inflation for Spain. Spain also unwisely used its new found gold to buy what they needed from other countries rather than invest it increasing production in their own economy by their own citizens. They also used it to pay for wars and trade route protection as the US is doing today. Cortes wrote in the 1590's: "Although our kingdom could be the richest in the world for the abundance of gold and silver that have come into it and continue to come in from the Indies, it ends up as the poorest because it serves as a bridge across which gold and silver pass to other kingdoms that are our enemies." People quipped, ~"Wealth is born in the Indies, dies in Spain, and is buried in Genoa."
A second gold bubble happened again after the discovery of gold in California in 1848.
The gold bugs ignore these bubbles and assert that it cannot happen again. However, the amount of gold mined has gone up geometrically with technology and price. These two factors make discovering and processing poorer and poorer ore worth the effort. Not withstanding that, the total amount of gold mined in all of history is still only 193,000 metric tons, enough to make a cube just 72 feet (22m) on a side or one acre, 9 feet deep, easily fitting into one large warehouse. That is not enough to replace all the currency around the world. But what if suddenly there was much, much more recoverable gold? On average, seawater is around 13 ppt gold. Since there are 1.3 billion cubic kilometers of sea water on earth, there are 169,000,000  metric tons of gold in seawater, 875 times more than has ever been mined. When someone invents a way to easily extract it, the price of gold will plummet. (It will happen -- remember people said man would never fly.) Moreover, the total gold on the surface of the earth and in its oceans is less than 1% of the gold in the earth, most of which has sunk far below the surface. Volcanoes brought most of it to the surface and who can say one won't bring up the mother load again?
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