In his podcast released yesterday evening, Peter Schiff explains why the price of gold plunged on Sunday night. More importantly, he reminds investors why gold is not a faith-based asset, like fiat money. He also reviews China's relationship to gold, and compares the current market to the last time a bear market in gold ended.

I am convinced, when his market turns, it's going to be vicious. When the people who have been selling their gold try to buy it back, it isn't going to be there. Because the people who have been buying into the selling… they're not going to turn around and sell it. When the speculative sellers are gone, there are no sellers left… I think the market is going to go up even faster than it has come down…

Audio length: 00:22:42

Highlights from the podcast:

“In just a few minutes, gold went from down a dollar to down 50 dollars. Somebody came into the market in a very short period of time with a major sell order. I don't know if it's one individual or a group of individuals, but all these orders hit the market at the same time, and gold immediately went down 50 dollars, below $1100. A minute or two later, it was only down 25 dollars. Then it kind of traded between down 25 and down 32, 33. The highest I saw it get after that was down about 18, 17 dollars…

“Why did someone come and dump all that gold in early Asian trading last night? Clearly, whoever sold all that gold, their goal was not to get a good price. Their goal was to knock the price down. Maybe that served their interests. Maybe they had a lot of puts. Maybe they had shorted a lot of gold stocks. Maybe they knew that if they could break key support overnight, they could do a lot of damage…

“If you now look at this bear market in gold stocks, this is now bigger than the bear market that went from 1996 to 2000. This one is much bigger, even though that bear market capped a 20-year bear market, because gold peaked out in 1980 at $800. So by the time it bottomed out around '99, 2000, it was down around $260. At the end of that bear market, during all the euphoria of the dot-com bubble, we had this final drop in gold stocks that went on for four years. This drop, in the last four years, is bigger than that drop, even though the price of gold is still about $1100. It's not $260. We've had a much worse bear market in gold mining stocks. And the relative valuations of gold stocks, relative to the stock market – forget about the Nasdaq (QQQ), because that was crazy – but if you look at it relative to the S&P 500 (SPY), gold stocks are much cheaper today than they were at the peak of the dot-com bubble. If this is a measure of trust in central bankers, or fear that a they're going to screw up, obviously the gold stock market is telling you that people have more confidence now in the federal reserve and Janet Yellen than they did in the Federal Reserve and Alan Greenspan in 1999, 2000. And we know how badly that confidence bubble ended for the markets…