Yeah in order to avoid counterparty risk its best to go physical, but there is huge divergence like you say that indicates gold is severely undervalued in USD. Essentially, all precious metals do its track the increase in base currency which is what makes it such a good inflation hedge.

But i beleive manipulation either through naked shorts at the comex and or confirmed manipulation by Deutsche bank has caused the divergence.
http://www.bloomberg.com/news/articles/2016-04-13/deutsche-bank-settles-silver-price-fixing-claims-lawyers-say