What is the term used for forms of money such as gold and jewels, which derive their value from direct trading?

The correct term for forms of money such as gold and jewels, which derive their value from direct trading, is commodity money. Commodity money has intrinsic value; this means its worth is based on the material it is made of. For example, gold and silver have been used historically as currency because they have value in themselves as precious metals, beyond just being a medium of exchange.

This form of money contrasts with representative money, which is a claim on a commodity (like a gold certificate that represents a specific amount of gold) but does not have intrinsic value itself. Fiat money, on the other hand, has value because a government maintains it and people have faith in its worth, but it does not possess intrinsic value. Digital currency refers to money that is available only in digital form, often with no physical counterpart, and it is different from commodity money in that it does not derive value from physical goods or materials.