Gold prices plunged more than 2 percent Thursday on the heels of the first Federal Reserve interest rate hike in nearly a decade. The commodity is now sitting near its lowest level since 2010, and with 8 ½ trading sessions left in 2015, the commodity is on track for its third straight year of losses — which would be the longest losing streak since 1998. But despite the horrid returns, one noted gold bug is sticking to his claims that the commodity could soon surge.
On CNBC's "Futures Now " Thursday, Peter Schiff stood behind his previous call that gold will reach $5,000. "It's still going to go there," said Schiff when he was asked about his uber-bullish prediction. "I don't think there's that much downside [in gold] because I think most of this is already built into the price," he added.
According to Schiff, regardless of what Fed Chair Janet Yellen says, the U.S. economy is "rapidly going into a recession," which will inevitably trigger the central bank to retract the rate hike and reinstate gold as the safe haven asset it once was.
"I think symbolically just to show that they have confidence in the economy that they have no confidence in, [the Fed] raised rates to 25 basis points," said the CEO of Euro Pacific Capital. Schiff has long believed the Fed would in fact never hike, but instead induce another round of quantitative easing.
"Normally when the Fed will raise rates it's when an economy is just getting going, so you have a lot of momentum in the economy and a lot of pent-up demand, but this recovery is already over," Schiff added.
He pointed to the disappointing November manufacturing number as proof that the economy is decelerating. "They're going quickly have to reverse course next year. They are going to bring rates into negative territory ... and they're going to do QE4 and it's going to be bigger than ever. "