Its an exchange brokered fractional reserve system
If everyone turned up at once at CBA or Westpac and asked for delivery of all the money they had saved then they would default as well. Fractional reserve systems have been around since the start of time. These systems carry enough inventory of gold to satisfy the fraction demand they expect to encounter.
Except the CME is an exchange based fractional system and the CME is is a clearing house , your risk is with (mainly) the counter parties not (just) the exchange itself.
So trading paper gold has to be high risk in this type of ongoing crisis.
MF Global and ANZ Opes are examples of what can happen if you dont read the fine print or understand the commercial risks with a particular broker.
When you hold gold physical you negate these risks completely
