We've seen how BTC is manipulated by contracts as well. I don't think anything is safe from derivatives.
My thinking is that pegging to the price of gold without actually holding gold has the advantage of not incurring the costs of owning actual gold. We just need a relatively reliable peg.
In addition, I think it is unlikely gold could go to $0.00. No amount of manipulation would drop the price to zero, that I could imagine. There would be a massive short squeeze if they tried that.
Although, with hyperinflation, gold could go $1 zillion.
But, so would HBG (Hive Backed Gold) not go to zero, yet "keep up with inflation".
It's not perfect, just good enough. As there are no constants in economics, except the amount of Bitcoin, gold would be close enough to a constant, in my opinion.
Golos had Golos Backed Gold and was a clone of steem very early on.
Unfortunately, one of our bad whales trashed it.
I haven't kept up with developments there since he did that.
Looks like they have shut down.
I wasn't aware. So, then there is precedent.
Oh yeah, lots of folks willing bite that hook.
They said they were paying out if you had enough, I'm not sure it was true.