Over the last couple of centuries, money lost its exclusive form of gold and silver coinage. Base metal coins and paper money, whose values were linked to gold at a fixed rate, gradually took over.
Linking printed paper notes and base metal coins to gold satisfied the requirement of money supply stability, given that the stock of gold is relatively constant, and only rises depending on how much new gold is mined from the earth.
“The above-ground stock [of gold] grows about one and three quarters per cent per annum, which is approximately equal to world population growth and new wealth creation. Money supply stability is thus guaranteed, in theory at least.”
- Source, Market Business News