Because gold is a product. If you buy gold and hold on to it yourself, you've purchased a product, and your money now belongs to some other party that can do with it as it wishes (generally, this means investing.)
If you "buy" gold and the bank "holds" the gold for you, you don't really think that they set aside a specific chunk of gold for you, with your name on it, do you? Of course not. They utilize the money that you send them to invest, and if you ever withdraw, they send you an appropriate amount of gold, and then replenish that gold for other people who may eventually withdraw.
You keep on saying "investing" "investing". What definition of the word are you using?
I was under the impression that you were using "investing" as in financial investing. Putting money somewhere that will make you more money. i.e. buying stocks, bonds, comic books, etc in the hope that you can later sell the stocks, bonds, or comic books for more money, earning you a nice profit.
Therefore investing in gold is helpful for you, but does nothing for the economy, since the capitol used is now tied up in yellow rocks. This is the investing that rich people tend to do. This sort of investing, while good for the rich people is bad for the economy because that money now becomes tied up in gold or stocks or bond and doesn't trickle through. Again, its smart to invest your money, otherwise a tragedy could happen (lose your job, major expenditure like hospital bill, etc) that you wouldn't be able to handle with steady paycheck. But Investing is bad for the economy because that money is now out of circulation. And yes, you can "invest" your money in the bank, and the bank can lend your money out, thus creating new money, but at the moment it isn't happening as much as we need it to. Skip to the end of this post to find out why.
In economics, investing means something different and specific. I'm stealing the definition from wikipedia but investment in economics means "the amount purchased per unit time of goods which are not consumed but are to be used for future production (i.e. capital)." I think this is the type of investment you mean by "investing", and this is for the most part good for the economy. This is stuff like buying a new widget-o-matic that allows me to make twice as many widgets as I did before, hiring a new salesman to sell widgets, teaching a widget-making employee how to make widgets better\faster, researching new ways to make widgets, etc.
Rich people don't do this sort of investing because... frankly they don't know how to do this. Does McDonalds need more people to handle the lunch time rush? Would buying a new fry cooker help profits? I don't know, and giving me 100 million dollars won't change the fact that I still don't know if a new fry cooker would improve profits for Mcdonalds.
And yes, Venture capitals is an example of a rich person that does this, but most rich people aren't venture capitalists.
You can't buy a million shares of Apple unless someone else is willing to sell those million shares of Apple. That person now has a tidy sum of money he ends up investing elsewhere. How doesn't that help the economy?
Unless the company is selling NEW Stock, buying stock is the equivalent of buying yellow rocks in the hope that they'll be worth more in the future. Only when the company releases NEW stock does the company get a share and economic investment takes place.
The person who sold you the stocks is a million dollars richer, but it's no guarantee that the million dollars will improve the economy. If he just uses it to buy another million dollars worth of stock then the economy didn't improve at all.
Assuming that you could just buy an infinite number of shares of whatever company, that company will who now has infinite capital will spend it to grow the business, thereby helping the economy. If the company just sits on the capital and does nothing, well, then there's no earnings for investors and they'll stop investing and pull their money out of the company.
Investing isn't infinite. Let's pretend we have a company called Costumes r Us, which specializes in costumes. It's September so I invest a few million dollars in Costumes R Us and open up a store in the mall. Its now October and I'm seeing amazing profits. It's now November, do I invest my profits in a 2nd mall store? Expand my business? No, because the demand isn't there for costume shops in November. I can invest a Million dollars into Costumes R Us, I can invest a Billion dollars in Costumes R Us. No matter how much I invest profits are going to be anemic after October in the costume business.
That's the issue we're having right now. Small companies are flush with cash, Banks have tons of money to lend, but no one to lend it to because the demand is gone. A company could hire 100 new widget-makers, but unless more people start buying widgets, hiring more widget-makers is a losing proposition.
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