How can an algorithmic artifact be a proxy for physical gold?
Someone has to update the network manually on the amount of gold in existence, since the digital network can't figure it itself.
This means: trust.
Trust & cryptocurrencies don't mix.
institution X assigns $1bn gold or other asset to BullionCoin. They premine 10million coins and sell those coins. you now have a cryptocurrency based on gold. advantage? you can trade those coins over the internet and have them redeemed the other end for the asset. (yes, i'm aware this is exactly the same as the foundation of early banking)
Trust? yep, but one needs to understand that 99% of the population will more likely trust this proposition tomorrow than Bitcoin. I predict we will see this, and not even backed by gold but simply cash. If there's a market to deliver this type of secured money transfer ability (which no one advocating Bitcoin is going to disagree with, shirley?), then we have to expect sooner or later an organisation will deliver it without all that messing about with a uncontrolled, decentralised network, in their view.