That's like saying food is jacked up in price by the belief that it is valued as food. Money defeats the inefficiency of barter. A common means of exchange is as important as goods themselves in a trading society. It should be rather obvious at this point that what drives gold's value is not industrial demand, but almost entirely monetary demand.
Gold is a pseudo currency in a market of currencies. Because it really isn't
used as a currency but is only traded in relation to other currencies, its price has little connection to even its use as a currency.
If I had a $700 item for sale, I'd trade it to you for an ounce of gold. Not because gold is a
wonderful currency accepted anywhere for anything, but because there's a sufficient edge market that I could easily offload it for ~1000
dollars, and
those I can use. With gold trading at around $1300 an ounce, that gives me $300 for my trouble in finding someone who will convert it to dollars, and the person I trade with a potential $300 for the trouble he has to go though to find the sucker who will pay the full $1300.
Gold is
not worth market value in a real transaction. There is no way in
hell that I would give you anywhere
near $1365 (bid price as of now) for an ounce of gold. It's a purely speculative market and
I don't feel like speculating. I'd want to dump it, and
I can't just dump it anywhere. The value of your gold takes a hit because of the disconnect between the suckers who believe it's a super-awesome-bestest-thing-ever currency and will pay $1365 for it and those of us who can look around and see that
NOBODY EXCEPT FOR THEM WILL TAKE THE STUFF, and so factor in the costs involved in shoveling it in their direction.
If you think that a SHTF moment will make you master of all, I'd say that's naive to the extreme. Governments stoop to controlling
birds FFS, such as the Queen owning all wild swans on open waters and the Federal Government pwning your ass if you kill or trade in eagles (up to a felony carrying two years and prison and $250,000 fine). Yet you think that governments would fail to control their monetary supply when it could be done as simply as a decree that only gold stamped as the Crown's may be used, with violations carrying penalty of death?
For SHTF protections, I'd stay far away from anything that is likely to be socialized. Even that won't necessarily do you any good. Ask the Native Americans how we treated their land, their forests, their herds, their air, and their water. But it's still the best you can do.