Paper contracts for gold and silver are massively overleveraged. In many cases, the issuer of the contract has only enough gold and silver to provide delivery on a fraction of the contracts issued.
I consider my gold and silver collection to be my ultimate fallback against hyperinflation. In a scenario like that, a very large percent of paper gold and silver contracts would attain a value approximately equal to the paper they are printed on.
It would take far less than hyperinflation to cause one or more issuers of paper contracts into default.
Physical metals don't default.