What is the market choosing when gold goes up?

I don’t really understand what gold is supposed to be used for in this economy. When I hear talk about the price of gold, I don’t think about its use. I’m not sure anyone really does. It’s almost a substitute for currency. That’s my understanding based on the price action and the claims about it being a hedge against inflation. When everything else gets too expensive, people buy gold. <br><br>If gold is somehow related to currency, how does the market choose between USD, EUR, JPY, gold, and cryptocurrencies? Gold is like the LOL! currency. I don’t think that term has been coined yet; hence, I’m coining it. <br><br>If the market chooses gold, is it a choosing a gold backed currency or gold for it’s own sake? It can’t be the latter unless a gold standard is somehow relevant. Although, everyone seems to want a gold standard but refuses to let go of the convenience of a fiat currency. If someone knew the secret of having both fiat and commodity backed currency, they’d have the secret to the magic money machine. <br><br>It doesn’t seem to be based on the gold reserve of a fiat currency. The US has way more gold than China, but the USD is somewhat “lower in value” than the CNY based on the USD/CNY exchange rate. <br><br>And we know it’s not “backed” by commodity so no one does trust that the government will honor the gold standard choosing the market over the government. <br><br>If gold goes up, the system is just moving currency to a currency that is a commodity. Can someone explain this to me? If you have gold backed currency, you can just buy the gold you need and skip the middleman. What is the point of a gold backed currency then?