It is actually its finite amounts that make it valuable. Anything that can be produced at will not hold up as a currency.
There is a finite amount of uranium on earth too, but the only reason it's considered valuable is because there is demand for nuclear applications.
Only a little over 10% of gold is used for industrial applications. Without the demand provided by people agreeing that gold has value as a currency, the price of gold would plummet. The high value of gold is self-fulfilling... it's based on people's faith that everyone else thinks it is valuable.
So the value of gold should in fact deflate over time, as we produce more and more of it.
Key here is that the total amount of gold on this planet is finite - not the production or extraction rate - making it truly valuable. Same thing applies to other natural resources such as oil, natural gas and diamonds.
I seem to remember reading that that's not the case anymore. As in, we actually can make gold through transmutation. The amount of energy required to do so is bigger than the "value" of the resultant gold tough.
+1 for the fine, fine irony. Intended or otherwise as it might have been.