I read somewhere that someone made the statement "gold is just like fiat money, and can lose its value at any time" (or something along those lines). This is not true.
Value is not something that is arbitrarily assigned. Value, or price, is determined by supply and demand. This is true for money, as it is for all other goods and services. Demand for currency is very, very high. When demand for currency falls, it mostly goes towards other currencies, and/or gold. If all currencies are backed by gold, then the demand will always be in the gold. Demand for gold will, therefore, only decline when other metrics decline (such as income, lower incomes = lower demand for currency). However, with currency, the main determinant is supply, as demand is extremely high and inelastic...
Most of the inflation (or, fall in the value of money) has come from increased supply of money, through quantitative easing, and the like. Gold is fairly rare and very expensive to obtain, its supply does not fluctuate very much.
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