Without owning physical gold, users must trust vault storage. It has an inherent risk that always presents in all custodial accounts, whether PAXG or Elitium proprietary vault (just hypothetical regarding Masulum's comment). In addition to embezzlement et al., companies also have risks associated with incompetence, like what if PAXOS gets default, is the token still redeemable, etc.

I have some gold stored in a state-owned enterprise (SOE), and it still has some risk associated with country default (country risk).

I'm not trying to fear-monger but to inform users that there are pros and cons of tokenization. Pros would be the convenience and everything that good from technological capabilities, and I agree that converting physical gold to fiat (or else) is troublesome. Well, since nothing is perfect, why not diversify? Users can easily own both physical and gold token.