Bianco said three weeks ago ETFs owned 84 Moz of gold and today they own 79 Moz. The price hasn't gone down even though 4.5 to 5 Moz have been sold off.
"There’s a huge underlying demand for gold in the last couple of weeks," he said, adding that what's been sold in just a few weeks is the the equivalent of about 7% or 8% of world production.
"That's bullish," Bianco said, "You can find a buyer for all that gold."
When asked who's buying it, he said, "Everybody else."
Bianco said ETFs are usually bought by retail investors and when the price broke $1600 they started to run for the exits — everybody else has absorbed their selling.
"When they start to wane on their selling – and they’ve already sold a record amount for the 10 year history in ETFs – I think the price will start to go back up again," he said, adding once the sell off is done, and it's stabilized, the price could make a run at $1900 or $2,000.
When asked why we should buy gold, Bianco said, "Gold is more than an inflation hedge, it’s an anti-fiat money hedge.
"In this currency war, every major central bank tried to out ease the next central bank and devalue their currency … Gold is the hard money currency in a world of devaluing currencies. That’s been its story for the last 10 years and I think that it will continue to be its story."
Watch the full interview here:
Front page image: Bloomberg TV screengrab