You may have to take legal tender, but you can link the amount of tender to the exchange rate with gold.
That's a complete non sequitur. What does that have to do with anything?
Gresham's Law makes sense but it also contradicts the idea that the market will always choose gold.
I never said that the market "will always choose gold". Where do you come up with that? I said that, in a truly free market, the market prefers gold and by that, I mean gold backed currency. Give someone the option for paper backed by gold and paper backed by nothing and they'll choose the gold backed currency. That's historically speaking and this isn't a truly free market. When there is a truly free market again, the market could settle on palladium. I predict it won't, however.