[bcg1]

If gold isn't money, then why do central banks have so much of it in their vaults?

[scrupulusalbion]

Strictly speaking, money (as opposed to currency) is whatever is the most commonly used currency in a given region. Gold is not generally used as a medium of exchange anymore (i.e. it is not a currency), so it is merely a valuable commodity.

[ThrustVectoring]

They reasonably expect to be able to trade it for money, should they need to.

[bcg1]

Why don't they have stocks, diamonds, or any other types of valuables in their vaults?

[ThrustVectoring]

Uh, what? They do. The Chinese government owns approximately $60 billion worth of gold, and $1.2 trillion worth of US treasury bonds.

[bcg1]

Let me rephrase... why don't they have anything other than gold or cash equivalents?

[ThrustVectoring]

They're very much risk-adverse (for good reason). In exceptional circumstances, they will take on other assets, though. See - the US Treasury's stake in General Motors.