Just like with paper money, gold isn't physically of significance. It is virtually of significance. If the computer says you have 1000 bars of gold, you have that much value, regardless of whether you have ever seen that gold, and regardless of whether it exists.
So why do banks have gold? They really only care about trading virtual gold. Why do people still prize gold? I think the real reason is that we have a lot of dragons out there. The kind of mythological dragons who hoard gold and princesses for no apparant reason other than to be a pig, and the kind who kill any valiant heroes who try to save them (until one finally succeeds).
But our dragons are different than the mythological ones. They store their gold in dungeons, and you can't get to see if anything is there at all until having completed a mafia-filled game of D&D. And then I start to wonder: when is our Knight in White coming?
The Germans Are Coming for Their Gold
A German federal court has said that country’s central bank should conduct annual audits and physically inspect its gold reserves worldwide, including gold in the custody of the Federal Reserve Bank o…