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Yes it is that valuable.

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because people think it's that valuable? or it's truly inherent?

If an alien spaceship sucked all the gold from the earth with a giant gold-magnet, what would we be unable to do without it, say 200 years down the road (assuming our current technology base), that we do with it now?

I get the argument that we need SOMETHING to fix value (I'm not sure I really agree with it these days), but why gold and not something else? Isn't it ultimately arbitrary, except to the extent that it's based on having done it for thousands of years?

This article explains it pretty well (simply)--sort of a mix of psychology and unique properties:

LINK

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From a elemental perspective, gold is the most logical choice for a medium of exchange for goods and services. It is abundant enough to create coins, but rare enough that not everyone can make them. It doesn't corrode, providing a sustainable store of value, and humans are physically attracted to its color and feel.

Societies, and now economies, have placed value on gold, thus perpetuating its worth. It is the metal we fall back on when other forms of currency don't work, which means it always has some value as insurance against tough times.

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