We already know that to at least one, sadly all too prominent, career economist gold is held by central banks simply due to "tradition [4]." Here is how another professor of economics perceives the value of gold to central banks.
To Joshua Aizenman, a professor of economics and international relations at the University of Southern California, dabbling in gold is mainly an attempt by bankers and officials to send a message to the world — one that signals an appetite for power or that broadcasts a desire to challenge a rival. “I doubt that the Chinese or the Russians actually believe that gold is such a great investment in terms of pure returns,” Professor Aizenman said. “But if they’re trying to suggest that they’re unhappy with the dollar or that they want to become a global player, then gold is very powerful.
“The investment is a symbol,” he explained. “It’s made for political, not financial, gain.”
That explains it: not just tradition, but symbolic tradition. Actually, let's just combined what all prominent economists [5]have recently said about gold, and we get... a [5]6000-year-old symbolically traditional bubble.
Source: NYT [6].
