Gold is money. Money is fungible. Resources other than gold can be exchanged for gold (or vice versa).
So you don't actually need gold. You need:
- Iron ore.
- Other ore to mix with the iron to make alloys.
- Coal to burn and smelt the ore into metal or to shape the metal.
- Water/oil/whatever to quench the metal.
- Stone to sharpen the weapons or round off the armor.
- Leather and cloth to put under the armor, as metal chafes.
- Labor to do the smelting, shaping, quenching, and sharpening or rounding.
In addition to all that, the soldier previously supported a family. Now you have to do that.
Now in your game, you are playing the lord (or mayor or whatever leader). The lord does not make each of these decisions directly. The lord delegates. When the lord delegates, the lord transfers resources to the delegee to handle things. For simplicity's sake, this is tracked as gold.
Using gold as the single resource means that you don't have to spend all your time making decisions about things like building weapons or gathering food. You delegated those tasks. Too many weapons and not enough food? Your delegees trade resources until that works.
Note that no matter how complex you make the system, with multiple resources, etc., it still won't match reality. In a real world, you would immediately have all the conscripts. There would be no way that you could add more (short of waiting for children to grow up).
In reality, the time to collect and spend resources is long before the actual conflict. In reality, your decision is going to be more like the Civilization 5 game. You can have an individual working on food or participating in the military or doing scientific research or collecting scrap metal to make into weapons or armor. Except that it's worse. Some people are going to be useless at one or more of those tasks.
Sending Ben the Blacksmith, who has a limp, out to collect scrap metal is not going to be nearly as effective as having him work in the smithy. It just takes too long for him to get around. And he has difficulty picking up things on the ground, as he can't squat down with his bad leg.
For game purposes, we ignore such details. Not just money, but labor and materials are fungible. This has some basis in reality. One economist described the process of buying cars via international trade as planting car seeds in Iowa. In reality, these were corn seeds, which grew, were harvested, and shipped overseas for money. The money was then used to buy cars from Japan or South Korea.
Similarly, you could have Ben making trade goods at his forge. You trade those to merchants for food and trade the food to local children who pick up scrap metal for you. This is very much like having Ben pick up scrap metal but more efficient. And again, we can measure this simply in the gold value of Ben's trade goods.
In game terms, do you want to make each and every decision like that manually? Realize that most of the decisions are the same. Yes child, I'll give you food for scrap metal. Yes child, I'll give you food for scrap metal. Yes... And there are many decisions. Where'd you get the food? Also, what is food? Is it an apple? A pear? A loaf of bread? A wheel of cheese? So the decisions can be many, quite similar, and yet subtly different.