The king's hoarding of the gold is not that big of a deal without a "legal tender" mandate. In a free banking system, as you point out, the peasants can use other things as money, and the value of gold as a currency just changes in real time to compensate based on the King's shenanigans. "Imperial credits aren't worth much out here, I need something more real" etc.
When the King requires that gold be the only legal money--that's what really allows him to manipulate the economy. Legal Tender laws are the real problem. With legal tender laws, there is no competition to keep a currency in check, and the for the purposes of manipulation, the sky's the limit. Without legal tender laws, devaluing one currency just results in people switching to a superior currency. Governments like power, and they like to mandate that taxes be paid in a certain currency. The gold standard is an attempt to limit the ability of a government to manipulate a 'legal tender' currency, by tying that currency to something physical. But without legal tender laws, you don't need gold. You can use soybeans, bitcoins, kongbucks, averaged indices of all the above, or whatever you and your customers agree on.