> the monetary value is merely historical
In theory, yes. However, the all-time high price that one can get for gold today is actual and current.
In theory, yes. However, the all-time high price that one can get for gold today is actual and current.
And we're talking about a country reserve, not exactly hand money.
My reply of "At the supermarket" is, I think, a succinct and correct response about the basic difference between currency and valuables. My local supermarket won't take US dollars either since I'm not in the USA. You know well enough that supermarkets in the USA do take dollars, and no supermarket anywhere takes gold (if you find one, let me know what it gives as change). The point still stands. If I'm wrong, I'd appreciate more information on why along with the down-votes.
Neither is any other "foreign currency" which also needs to be "exchanged to local currency first".
See that's the thing the markets are trying to figure out right now ... is gold an industrial commodity? In which case, yes it is terribly overpriced! Or, is it in a time of world-wide currency crises reviving its historical role as a store of value, an AAAA++ rated, supra-sovereign "monetary asset" (rather than granted an immediate for-daily-barter currency) with no debt burden and no counterparty risk? If yes, it might still be vastly undervalued!
This may change; it may be a bubble that collapses if and when faith in paper fiat currency is restored (you could read that as gold filling a temporary but valuable role as a hedge against unstable currencies). Or new deposits of gold could be found; or new ways of extracting it could arise.
However the supply of gold is quite limited; it's not like diamond where the only difference between very expensive diamond and cheat-as-dirt coal is a detail of removing impurities and rearranging the atoms.