Big Move Coming for Gold as Debt Crisis Breaks Everything: Peter Schiff
In a recent Commodity Culture interview, Peter Schiff argued that gold is preparing for another major advance once markets accept that recent rate hikes will not outpace inflation. Gold had rallied from around $4,000 to over $4,600 in August before selling off to the low 4,100s, a move Schiff attributes to the shift from expected rate cuts to actual hikes following hotter inflation data. He sees the market building support near the 4,000 level that held after the earlier peak near 5,600.
“I think that gold’s getting ready for another big move up once the markets recognize that these rate hikes are meaningless,” Schiff said. “The problem is we have 40 trillion in debt and it’s not just that the US government is borrowing a lot of money. The rest of the world governments are borrowing a lot of money. The debt chickens are coming home to roost all around the world.”
Schiff rejected the conventional view that rising yields are bearish for gold. With CPI already up 4 percent through the first nine months of 2026 and likely to finish the year with a five handle, real rates remain negative even if the Fed funds rate ends the year around five percent. “Rather than a headwind for gold, I think the rising bond yields are going to be a tailwind because they’re not going to rise enough to offset the loss to inflation.”
The debt math is becoming unsustainable. Interest on the national debt is already running at 1.4 trillion dollars annually and Schiff expects it to reach 2 trillion next year, surpassing Social Security. “The US government is not going to be able to service the massive debt that it ran up when rates were at zero. Now that rates are at five, yields will hit 6 percent then 7 percent then 8 percent.” He sees the same pressure appearing globally, from Japan to France, where 10 year yields have already reached 5 percent.
On silver, Schiff continues to view current levels as attractive. He has previously called the low 60s a likely floor and now treats anything under 60 as the bottom area, with $50 representing long term support that once served as major resistance from 1980 through 2011. “Silver looks cheap here,” he noted, adding that 50 is the new 20 for the metal.
Schiff prefers mining equities over physical metal for the bulk of his own exposure because the companies stand to benefit from both higher prices and undervalued in ground reserves. “I hold more mining stocks than physical,” he said, pointing to smaller producers and royalty companies as offering the best relative value. Larger firms will eventually acquire juniors after years of underinvestment in exploration.
His Euro Pacific Gold Fund overweight position in juniors and royalties reflects that view. Even with gold above 4,000 and oil above 90 dollars a barrel, he sees the metal as still cheap on a relative basis, and expects higher energy prices to eventually force easier monetary policy.
A broad market correction remains possible, particularly if the AI related capital spending boom collides with tighter credit and rising rates. Physical gold and silver may experience temporary volatility but Schiff expects them to hold up better than equities because they function as money in a crisis. “Hold them as they may be needed as money,” he said. The ultimate signal that the inflation fight has been lost will be a weakening dollar, gold rising on hot inflation data, and bond prices rising rather than falling when rates are hiked.
This outlook tracks closely with the case Schiff made on the SilverTrade Insider earlier this year in the interview titled The Last Bull Standing. There he argued that the gold and silver bull market remained intact despite corrections, that support was forming well above prior cycle highs, and that a sovereign debt crisis would force the Federal Reserve to choose inflation over a financial collapse worse than 2008.
The same dynamics of rising yields, negative real rates, and the inability of private buyers to absorb the growing debt supply continue to drive his view that the next leg higher in gold and silver is still ahead.
