Gold slides on hot inflation; Schiff: $4,145 is a gift

Gold declined this week as US inflation figures exceeded forecasts. However, economist Peter Schiff described the metal at $4,145 as a present, contending the Federal Reserve has already lost the battle against rising prices.

At first glance, the decline seems contradictory. Gold traditionally serves as a hedge against inflation, but three reports in three days showing higher-than-expected prices drove it lower.

Why Peter Schiff Considers the Gold Dip a Gift

CPI, PPI and import prices all came in hotter than expected this week. Traders sold gold anyway. They think it means the Fed will fight harder. It means the Fed already lost. Gold at $4,145 is a gift.https://t.co/wGO2bHHVdM

— Peter Schiff (@PeterSchiff) October 17, 2026

First was the September CPI, which showed consumer prices rising 3.7% from a year earlier. This exceeded the expected 3.6% increase.

Wholesale inflation came next, with producer prices up 6.3% year over year, marking the largest gain since 2022.

Import prices meanwhile increased 1.1% in September, topping the 0.8% consensus estimate.

Nevertheless, traders offloaded gold. They interpreted the figures as an indication of further rate increases by the Fed, diminishing the appeal of non-yielding assets like gold.

Gold fell roughly 0.6% this week and has declined over 2% during the past month. The steepest drop occurred on the day CPI was announced, followed by a partial recovery.

Conversely, Schiff argues that persistent inflation demonstrates the Fed's tightening has been unsuccessful. He views the lower gold price as an opportunity to purchase rather than a warning.

Schiff contended gold ought to have surged this week, adding that traders instead gave buyers a bargain.

Is the Fed Still Able to Win the Inflation Fight?

Market sentiment remains opposed to Schiff's perspective. According to Kitco, CME FedWatch data indicates a 90% probability of a rate increase in December.

Meanwhile, Federal Reserve Chair Kevin Warsh expressed optimism about the economy during the week. Yet he did not provide a clear indication regarding the future course of rates.

Similarly, Hamad Hussain from Capital Economics anticipates the gold price drifting lower through year-end as the Fed continues rate increases. Bank of America likewise forecasts gold will remain below $4,000 through the end of the year.

Precious metals have already felt the strain. Earlier this month, gold and silver lost $400 billion in paper valuation within minutes.

Following the CPI release, silver dropped to its lowest closing level of 2026.

Ultimately, Schiff's gold price prediction hinges on one condition. If inflation continues to exceed forecasts despite higher rates, investors might start to question the Fed instead of expecting additional tightening. Such a shift would benefit tangible assets such as gold, a position Schiff has advocated for years.