Peter Schiff Warns S&P 500's Rally Is An Illusion, Down 57% When Measured In 'Real Money'

The S&P 500’s recent rally masks a significant decline in real terms, according to prominent economist Peter Schiff, who points to gold’s superior performance as evidence of the market’s true condition.

What Happened: “The S&P is not at a record high if priced in real money,” Schiff wrote Tuesday on X, highlighting that the index’s value in gold terms has fallen 57% since 2000. “The nominal gain is all due to inflation,” he added.

The data supports Schiff’s analysis. While the S&P 500, tracked by SPDR S&P 500 SPY, has risen 325.29% from 1,441.25 points in January 2000 to 6,129.58 points currently, gold has outpaced it with a 957.45% gain, climbing from $277.08 to over $2,930 per ounce on Tuesday.

Schiff highlighted gold's surge to a new record high, surpassing $2,940 for the first time, suggesting that “$3,000 is clearly a high probability this week.” He criticized the Federal Reserve and mainstream financial community for overlooking the significance of this rally, warning that they do so “at their own peril.”

The S&P is not at a record high if priced in real money. In terms of gold, the S&P is worth less than 2.1 ounces. At the start of this century, the S&P was worth 4.85 ounces. So in real terms, the S&P is down 57% over the past 24 years. The nominal gain is all due to inflation.

— Peter Schiff (@PeterSchiff) February 18, 2025

Gold is at another record high tonight, trading above $2,940 for the first time ever. $3,000 is clearly a high probability this week. The significance of this major gold move is being completely overlooked by the Fed and the mainstream financial community, at their own peril.

— Peter Schiff (@PeterSchiff) February 19, 2025

See Also: Warren Buffett Unfazed By Trump’s Tariff Threats: Oracle Of Omaha Bets On Mexico, Beer

Why It Matters: Gold’s recent surge toward its record high of $2,940 comes amid growing economic uncertainty, particularly surrounding U.S. trade policies. The precious metal’s appeal as a safe-haven asset has strengthened despite hawkish Federal Reserve signals.

Fed Governor Michelle Bowman and Governor Christopher Waller have both advocated for caution on interest rate cuts, citing persistent inflation concerns. Their stance has tempered gold’s advance but hasn’t reversed its upward trajectory.

Market participants are closely monitoring Wednesday’s Federal Reserve minutes release and potential developments in Russia-Ukraine peace negotiations, factors that could influence both gold prices and broader market sentiment.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.