Here Is The Gold Market In One Fantastic Chart

After a week of choppy trading, King World News is pleased to share with its global readers a fantastic chart which sums up the gold market in one image. The chart was sent to us from Egon von Greyerz, founder of Matterhorn Asset Management in Switzerland. But first, here is what Greyerz said he is looking for in 2013: “In 2013 I see the dollar falling and stocks crashing. Initially investors will sell stocks and buy bonds. Then, as the bond market starts falling and interest rates go up, they will sell the bonds and go into cash.”
Egon von Greyerz continues:

“They will see that cash will not hold its value because of all of the money printing. Interest will surge, and they will go into physical gold. That will put enormous upward pressure on the gold price.

So bubble after bubble will burst….

“In the meantime, governments are getting bigger and bigger, socializing countries and totally killing private initiatives and entrepreneurship.

Turning to gold, Eric, Goldman is now bearish on gold. Many times with Goldman when they actually publish their views that means they are looking to go long if they are not long already. So they are telling everybody else to sell gold so they can buy it cheaply.

In the meantime, Morgan Stanley is bullish and UBS is bullish. I actually talked to one of the top guys at UBS and he said he expects the shorts to cover in the very near future.

Looking at China’s production and imports of gold, that is just unbelievable in the last decade. I’ve included a chart which shows a graph. In 1980, they had 50 tons of imports and production, which was mainly production and no imports (see chart below).

By 2000 they had 175 tons (of domestic gold production). In 2012, Eric, they imported and produced 900 tons. Of that 900 tons, 500 tons was actually imported. It is just amazing what is happening in China.

So China is buying and many other governments are buying and nobody is selling gold. Also, worldwide vault capacity is being built very rapidly. So worldwide there is massive buying going on. So where is all of that gold coming from?

The gold is coming from (Western) central banks. Eric Sprott has talked about this in the last couple of months. So we’re seeing a shift from central banks, that clearly will not have the gold they say they have, into private ownership.”