I’m looking at Melachim 1 10:16,17.
Why make shields of gold even if there was lots of it?
Would gold be more effective than iron in battle?
What was the beis ya’ar halevanon?
Interesting question. I couldn’t find anyone who discusses your question but I would like to offer an explanation. Let’s look at your second question first. The shields were placed in Beis Yaar Halevanon, the gemora Yuma 30b says that Beis Yaar halevanon was the Bais Hamikdash. The reason it was called this name was given the name forest, was to show that the same way that a forest grows things, so too the place of all growth is from the Bais Hamikdash. The gemora says that Shlomo planted trees of gold(!) and they grew fruits(!), and when the wind blew, the golden fruits would fall of the trees and that provided the kohanim with a livelihood. R’ Yehonason Eibshitz (Yaaros Dvash – Drush 4) explains how Shlomo was able to plant trees that grew gold. He writes that since the world was created was that it sprouted from the “even shasia” which is in the place of the Bais Hamikdash, therefore all goodness essentially sprouts and channels through the makom hamkdash. The reason why certain countries grow certain fruits and not others is because those countries have its pipelines and channels for those things that connect it to the bais hamikdash. He says that Shlomo Hamelech knew exactly where each of these routes were. He also knew where the route of gold that goes to certain countries was. He then planted trees on top of these routes, and it grew gold!
This is why the makom hamikdash was called Beis Yaar Halevanon, to show that it is the source of all goodness. It could be that this is why Shlomo put the shields specifically over there, to show that the Bais Hamikdash is the source of such extravagant wealth. I wonder if the purpose of these shields was really not for fighting in battle, but as a symbol of the exceptional bracha that the Bais Hamikdash gave them. Therefore even if iron would be technically more protective, but that wasn’t the real purpose of these shields, but specifically from this type of extremely rare and expensive gold.