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Gold has been the longest most stable 'currency' historically. Governments with some of the largest economies hold large supplies of gold (and they're not trading it for BTC). It's value has been on par with inflation since we've started keeping track of its value. This creates confidence among buyers.

People agree it has value because the most powerful players in the global economy agree that it has value. There is also a limited amount of it.

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> There is also a limited amount of it.

Do people trade gold 'still in the mountain'? I could start a market for gold still underground, effectively saying "you have purchased 1kg of gold, but to redeem, you have to pay $500 of mining costs".

Since there is a near unlimited supply of gold in the entire earth's crust, that could work to make a price ceiling on actual gold, which in turn would severely reduce its use as a reserve currency.

I see your point but it's not like we ever just mine a ton of gold and flood the market. New gold gets mined but it's not done at a rate that influences that market price. Theoretically yes, there is an unlimited amount, but in practice most of that gold will never be found.

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