Reacting to Gold’s $116 drop on October 22, the popular American economist Peter Schiff estimated that the downturn is likely driven by stock market turmoil but will, eventually, prove bullish for the precious metal.
Specifically, the expert interpreted the sell-off that also affected equities and cryptocurrencies on Thursday as ‘bracing for a tech wreck and an unwind of the leveraged AI trade.’
He, however, drew a sharp distinction between the drop in commodities and other assets, opining that investors might be correct about an imminent artificial intelligence (AI) crash, but will be proven wrong regarding gold. Specifically, he claimed that the ‘stock market crash will be bullish’:
Gold fell $116 today, closing just above $4,000 support. Traders seem to be bracing for a tech wreck and an unwind of the leveraged AI trade. They may be right to expect that, but they’re wrong that gold will fall too. Gold already corrected. A stock market crash will be bullish.
Finally, he seemingly identified the $4,000 price point as a key support zone for the precious metal, implying that the commodity is unlikely to move lower in the mid- and long-term. This thesis received a test later on October 22 when gold briefly fell toward $3,990 before recovering to its press time price of $4,023.96.
Peter Schiff warns the recession could start before the Midterms
Meanwhile, Peter Schiff published several other X posts on Thursday, providing additional insight into his thinking.
Specifically, he explained that the AI-related capital expenditures (CapEx) were the only thing keeping the U.S. gross domestic product (GDP) positive, meaning that, in his estimate, gold and Silver miners will benefit greatly from the recession despite being ‘down too’ for the time being.
Investors are concerned about a slowdown in AI capex as borrowing to finance the buildout becomes more expensive and scarce. Gold and gold miners are down too, but since AI capex is all that's keeping GDP positive, the impending recession is very bullish for gold and the miners.
— Peter Schiff (@PeterSchiff) October 22, 2026
Additionally, while Schiff did not provide a specific timeline for the crash he is anticipating, he identified the record-high stock valuations, the sharp increase in bond yields, the job market being ‘soft’, and the rising inflation as factors making a collapse ahead of the midterms possible.
Overall, the popular economist retained a generally bearish stance for a long time, describing the U.S. economy as weak.
Famous ‘gold bug’ estimates U.S. economy worse under President Trump
In an October 21 X post, he also reiterated his estimate that the situation has been deteriorating since President Donald Trump entered the White House for the second time, citing slower GDP growth and accelerating inflation as key evidence:
Larry Kudlow just said there is no question that the U.S. economy is booming. Given that GDP growth during Trump’s first two years is lower than during Biden’s last two years, but with higher inflation, based on what evidence does Kudlow conclude the economy is booming?
Lastly, the famous ‘gold bug’ warned cryptocurrency investors to reconsider ‘HODLing’. Though he acknowledged that assets like Bitcoin (BTC) have been performing comparatively well, he cautioned BTC traders against complacency, saying the recent moves could be ‘just the calm before the storm.’
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