Gold price slid this week on hotter-than-expected US inflation data. Yet economist Peter Schiff called gold at $4,145 a gift, arguing the Federal Reserve has already lost its inflation fight.
On paper, the selloff looks backwards. Gold is a classic inflation hedge, yet three hot price reports in three days pushed it lower.
Why Peter Schiff Sees a Gift in the Gold Price Dip
The September Consumer Price Index (CPI) came first, with consumer prices up 3.7% from a year earlier. That beat the 3.6% forecast.
Wholesale inflation followed a day later. Producer prices jumped 6.3% annually, the biggest gain since 2022.
Meanwhile, import prices rose 1.1% in September, above the 0.8% consensus.
Even so, traders sold. They read the data as a signal for more Fed rate hikes, which make non-yielding gold less attractive.
The gold price slipped about 0.6% this week and has lost more than 2% over the past month. The sharpest drop came on CPI day, before prices partly recovered.
In contrast, Schiff says stubborn inflation proves Fed tightening has failed. For him, a weaker gold price marks a buying window rather than a warning.
Schiff argued gold should have soared this week, adding that traders had instead handed buyers a gift.
Can the Fed Still Win the Inflation Fight?
Markets still lean against Schiff’s view. CME FedWatch pricing implies a 90% chance of a December hike, according to Kitco.
At the same time, Fed Chair Kevin Warsh sounded upbeat on the economy this week. However, he offered no clear signal on the path of rates.
Likewise, Hamad Hussain of Capital Economics expects the gold price to drift lower through year-end as the Fed keeps raising rates. Bank of America also sees gold below $4,000 into year-end.
The pressure has already hit precious metals hard. Earlier this month, gold and silver shed $400 billion in paper value within minutes.
Silver then sank to its lowest 2026 close after the CPI release.
Ultimately, Schiff’s gold price call rests on one test. If inflation keeps beating forecasts despite higher rates, investors may start doubting the Fed rather than pricing in more hikes. That shift would favor hard assets like gold, the trade Schiff has championed for years.
