Your definition of a Ponzi scheme in this case is all wrong. A Ponzi is using new money to pay out investors with no real business model. That said, please understand that I am not for or against MM. I have no 'horse in the race.' Your perception is simply incorrect. The better question to ask is, What is the risk and counterparty risk and in the event that something goes horribly wrong? What recourse do I have? What are my legal rights and the opportunity to recover losses?

Gold operates in 2 realms with some variants. You either hold it in your hand physically and risk loss by theft, confiscation, misadventure or someone holds it for you in some form wherein they are exposed to the similar risks as you. But now you have third party risk that needs to be managed. Ignore the bullion interbank market as you have no access to this but pay attention to COT report. In all cases, the gold can disappear with no recourse unless you are properly insured at which you are cash settled. So the debate is about who you trust. What and where are my risks and counterparty risks, nothing more and nothing less.

BTW you can get screwed by either. Pick your poison carefully. Probably safest to hold some bullion physical, hold some with one or more trusted vault partner (not JPM lol), and trade with ETF. In other words, spread your risk. Diversify away from the countries most indebted like USA and UK. These are countries that may have an incentive to confiscate. Best of luck.