EatTheRich
President
Like other commodities, the average price is based on the cost of production at its most efficient.The cost of production varies from mine to mine.
Gold's limited availability severally restrict it's potential use as money. There isn't enough Gold in the world to make it a realistic currency.
Gold’s rarity at the same time raises the price per ounce, threatens to constrict the money supply if it is a leading currency, and creates awkward political situations for countries that have to rely on leading suppliers (Russia, Australia, S. Africa) to supply it.
Using gold as money is also strictly speaking throwing potentially useful labor and capital down the drain based on the waste involved in production.
Gold might still be the best bet for a socialist United States since it would help stem inflation, enforce fiscal discipline, and facilitate importing.