A coin placed into the hands of the dead before burial, granting them fare for the long journey ahead.

This is an obvious reference to the myth of Charon's Obol (Better known as the payment for the ferryman to cross over into the afterlife). But there is a question to be asked and answered. Whose tradition is it to place a coin into the hands of the dead, the Knights, or the ones whose hands hold these coins?

(On a side-note, this variation of Charon's Obol is directly stated to be placed within the deceased's hands as fare. Not within the mouth or upon the eyes, thereby eliminating any idiotic notions that the coin is to be used as anything other than payment for Charon. Or whatever the Spirilian counterpart of him is.)

But wait, you cry out, we've been here for years and we have yet to see a dead Knight holding onto any Dead Gold. Nor has anyone spoken of this ritual! And that is a valid objection. Which I will now proceed to debunk.
You see, this tradition of placing Dead Gold into the hands of the dead is just that, a tradition. Maybe it once had some significance in some far-off time where fears of spirits and ghosts and the Great Beyond could be easily assuaged by seemingly meaningful acts, like placing coins into a recently passed loved one and reciting some arcane passages so that they could safely pass through to the afterlife. But with the advent of technology and scientific reasoning and the bridging of the gulfs between worlds, surely the spiritual beliefs that were once held so closely would be rationalized as meaningless and forgotten? Of course not! It is one thing to tell someone what happens to their molecules when they die, and a completely different one to tell them that their soul will pass into another plane of existence. We know better than to believe in stories, and yet we choose to believe in them anyway, as a comfort. Or because our forefather's did it, and their forefather's and the forefather's before them. There ain't no reason to break with tradition now! Unless, of course, it is inconvenient to whatever objective you have i.e. getting the hell off this planet.
Still doesn't explain why our enemies have them. I would've thought the answer to that would've been obvious. There is a hold within the Skylark which is devoted to carrying/creating the Dead Gold that is to be given to the recoverable corpse of a Knight as whatever funeral rites are performed. This hold must have spread its contents all over Cradle once the Skylark went down, there to be discovered by the mindless and not-so-mindless inhabitants of the Clockworks. The method to create new Dead Gold must be known to almost all Knights who carry the newly minted Dead Gold upon their person and then promptly lose it to marauding Fiends and Undead due to tempting fate by carrying the possessions of a dead man on their person. Might be bad luck to even talk about it to others.

A variation of this theory says that the Dead Gold belongs not the Knights but to the other prolific humanoid inhabitants of Cradle. The Gremlins. The minting of metals would fit into their mechanical mindset. And since there is no doubt that Gremlins do die with Dead Gold on their person it would be a simple matter for someone else to take it.

The second theory says that those who hold the Dead Gold were buried with it, and yet they rose from the grave anyway. If so then it would seem that Lucian of Samosata was correct and the denomination of coin accepted by Charon changes, and those who are buried with the wrong coin are basically barred from entering the afterlife until they bring the proper tribute (also explaining all the stuff Undead/Fiends carry).