Is gold money today?, asks great economist and friend David de Bedoya at his blog

We know what gold is. The 79st element of the periodic table. That's it. Universally agreed, so we have half the work done. We additionally know that gold has nice properties to be money. However, having potential to be something doesn't actually make that into said something.

Next: What is money?. That's where you have a few definitions.

  • Common view: The concept of money that the average citizen employs. Basically, "tokens that you can exchange for other goods". Gold is not this, since those tokens are iredeemable pieces of paper in most of the world.
  • Chartalist view: "Money is always a chartal mean of payment. To those chartal means of payment we call them money. The definition of money is, so, that of "chartal mean of payment" (Knapp's definition, extracted from Juan Ramón Rallo's fine analysis of the conceptions of money). Of course, state money today is made of paper and metals other than gold, so this view would rule out gold as money too.
  • Mengerian view: "Money will tend to be the asset whose marginal utility decreases at the slowest pace". Said  good will have the thinnest bid-ask spread. Here are some (01-09-13).
    • Gold-USD:  1$  (0.071% of price)
    • Gold-EUR: 0.76€ (0.072% of price)
    • Gold-GBP 0.65 £   (0.072% of price)
    • EUR-USD:  0.0005$ (0.038% of price)
    • EUR-GBP: 0.001€  (0.12% of price)
    • GBP-USD: 0.002$ (0.12% of price)
    • USD-JPY: 0.15$  (0.15% of price)
    • USD-Oil: 0.06 (0.08% of price)

Nothing clear can be extracted. Gold spreads seem to be on par with the EUR-USD. We could say with reasonable accuracy that today within a country, money tends to be its governmet fiat paper. But at a world scale, candidates for being the most liquid asset, that is, money are the US dollar or gold . Nothing can be said with absolute clarity from here.  So we don't get an answer from this view.

  • Asset of last resort view: "Money is the asset wealth will flow to in the event of a brutal economic meltdown". With good properties and a History going back millenia, gold is indoubtedly the best candidate for this view. We get a glimpse of this in every financial crisis: wealth flows to gold. So from this perspective, gold would be money.

So is gold money? I'd answer with a no to that, as per the common view of the meaning of the word money. However, gold is the stable bedrock (in the long term) that lies below the moving ocean in which the ships of national currencies rise and sink. It'd be safer to say that in 100 years gold will still be used as it is today than saying that the US dollar will be.