I don't think that's really true. Most precious metals are valuable because people think they're valuable - they're propped up by a collective myth, by the collective belief that there will always be someone else willing to pay. Sure, there are industrial applications, but those are not the primary drivers of value, especially not historically.
If gold-plated contacts cost more than they're worth, nobody would make any as it would have a negative ROI.
I agree that the market cap of gold is higher than it would be if industrial applications were the only source of demand. But given that gold is used for industrial applications, it must not cost more than it is worth for those applications. Hope that makes sense.
That it sells for X proves that it adds at least X amount of value.