Mises differentiated between these two concepts as follows:
Originally posted by uberliber
As for the main question here, I would say that gold has intrinsic (objective) use-value whereas paper money does not. But if the debate over "intrinsic" or "objective" causes any difficulty, I think we can safely drop it. The key difference between fiat money (e.g., the modern American Dollar) and commodity money (e.g., gold) is found in the word "fiat." Gold is valued apart from its use as money. The dollar is not (other than rare items for collectors). And the dollar is given a privileged position by force (e.g., legal tender laws, its being demanded in payment of taxes, the criminalization/taxation of other forms of trade, and the criminalization of counterfeiters), not by its own merits. (Incidentally, in the past, when the U.S. government did not prevent it by force, foreign currency would circulate freely as money alongside domestic (government and private) currency. History shows that there is no need for a privileged government currency.)
"Acting man believes that the services a thing can render are apt to improve his own well-being, and calls this the utility of the thing concerned. For praxeology the term utility is tantamount to importance attached to a thing on account of the belief that it can remove uneasiness. The praxeological notion of utility (subjective use-value in the terminology of the earlier Austrian economists) must be sharply distinguished from the technological notion of utility (objective use-value in the terminology of the same economists). Use-value in the objective sense is the relation between a thing and the effect it has the capacity to bring about. It is to objective use-value that people refer in employing such terms as the "heating value" or "heating power" of coal. Subjective use-value is not always based on true objective use-value. There are things to which subjective use-value is attached because people erroneously believe that they have the power to bring about a desired effect. On the other hand there are things able to produce a desired effect to which no use-value is attached because people are ignorant of this fact."
--Mises, Human Action chapter VII
The dollar has market value only because of the use of force/coercion. Gold has market value because of the objective uses for its material properties desired by free people.