Gold has gained 4 percent in 2014 after plunging 28 percent last year, and Peter Schiff, CEO of Euro Pacific Capital, thinks the rally will continue.

April gold futures settled at $1,251.20 an ounce on the Comex Tuesday. The increase this year has come amid a slump in U.S. stocks and turmoil in emerging markets.

Gold could end the year much higher, Schiff tells CNBC. "January could be a good harbinger of things to come for the balance of 2014."

While the Federal Reserve has tapered its quantitative easing twice already, and many economists forecast it will finish QE by year-end, Schiff sees the Fed reversing field.

"The real momentum to a new surge in gold is going to be when the Fed comes back with another QE plan that's even bigger," he said.

The Fed can't cut rates any further, and the economy is headed back to recession, Schiff says. "What is Janet Yellen going to do to try to revive the economy?" he asked. "There's only one thing she can do, and that's print even more money."

But some say the gold rally is running out of steam. "The gold positive flows from the loss of risk appetite, as a result of emerging-market turmoil, provided support, but it was limited and short-lived," Bart Melek, head of commodity strategy at TD Securities, told Reuters.

"So far, institutional investors continue to stay clear, while hedge funds are only engaging on a relatively small scale on the long side."

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