Regardless of whether a currency is backed or not, you still need to decide how much of that currency you should physically produce. If you are dealing directly in gold, you have to decide how many coins to mint. If you are gold-backed but not actual gold, you need to decide how much currency your market demands. Then you buy that much gold, stick it in your vault, and then you produce the bank notes. If it's purely fiat, you do exactly the same thing but skip the part where you buy the gold.