Peter Schiff, chief economist at Euro Pacific Asset Management, stated on X today, October 22, that a stock market crash would be bullish for gold. His comments followed a significant drop in gold prices, with Schiff observing, "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."
Schiff's remarks come as major tech indices like the Nasdaq saw a 2.6% decline today, while the S&P 500 fell 1.2%. Recent Gokhshtein Media coverage highlighted the increasing adoption of AI by Bitcoin miners, a trend that could be linked to the "leveraged AI trade" Schiff referenced. The Crypto Fear & Greed Index currently sits at 68, indicating 'Greed' in the digital asset markets, though Schiff's focus was on traditional assets.
The statement implies that investors should consider gold as a hedge against a potential downturn in the broader stock market, particularly in the tech and AI sectors. Schiff suggests that gold has already undergone its correction and is poised to benefit from a flight to safety if equity markets experience a significant crash. His view contrasts with the immediate market reaction that saw gold fall alongside other assets today.
