All eyes are the Federal Reserve's policy announcement. But while it's expected to be one of the year's most important events for stocks and bonds, Peter Schiff believes he has already figured out the likely impact on gold. Because according the CEO of Euro Pacific Capital, whatever the Fed announces will end up being bullish for the precious metal.
Many expect the Fed to announce that they will begin to reduce, or taper, the pace of its massive bond buying program. According to the latest CNBC Fed Survey, market participants see the a taper of about $15 billion coming, and a plurality believes that it will be announced this month.
Peter Schiff believes that a smaller taper is coming. But he says that no matter what the Fed announces, gold will end up rising.
On CNBC's "Futures Now" on the eve of the Fed's expected announcement, Schiff outlined three scenarios, and went on to explain why each would end up being good for gold.
Scenario 1: No taper
"If it's no taper at all, I think gold will rally," Schiff said.
This makes a great deal of intuitive sense, as tapering concerns have certainly appeared to weigh on the gold market in the back half of the year. After all, Fed bond-buying has depressed interest rates, making noninterest-bearing assets like gold look more attractive. And because the Fed simply "prints" the money used to buy those bonds, some believe quantitative easing will end up creating inflation, which would be a boon for gold.
That said, Schiff does not see a Fed announcement of no tapering as a likely scenario.
(Read more: The best Fed taper scenario possible?)