Gold has a lot of practical applications now (although is of course still treated as a ‘precious’ metal of value), but hundreds of years ago it was just a shiny metal. Why did it demand value, because of it’s rarity? Why not copper, because it was too easily found? What made it valuable ahead of other similar metals?
Also, it helps for a currency to not only be hard to duplicate (the costly/difficult extraction and refining process helps here), but also for it to have no other purpose.
When you’ve got money that you can directly use, people will use it for that, and not as money, which is bad for the flow of money. And you run into divisibility issues: a tiny gold coin is fine, but 20cm of cloth is pretty useless.