The outlook for gold is rosy, because the Federal Reserve will withdraw from its policy to taper quantitative easing (QE), says Peter Schiff, CEO of Euro Pacific Capital.

Gold plunged 28 percent last year amid concern that the Fed would taper its bond-buying program, which it finally decided to do in December.

The Fed cut its bond purchases by $10 billion a month, and many Fed watchers expect QE to finish by year-end.

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The market has "priced in a tapering, and I think they're too aggressive in pricing it in, because I don't believe the Fed will actually follow through with the tapering timetable," Schiff tells CNBC.

"If the Fed really were to withdraw the stimulus we would be in a worse recession than the one that we were in in 2008, which started all this stimulus."

The Fed will merely talk about tapering further, Schiff says. "The gold market already has factored in a complete tapering and somehow a shrinking of the Fed's balance sheet, which the Fed can't do without destroying the economy."

So what does this mean for the precious metal? "I think the case for gold is very, very bullish," as QE continues, Schiff says.

Not everyone is bullish on gold. Morgan Stanley analysts Peter Richardson and Joel Crane lowered their 2014 price target for the metal by 12 percent to $1,160 an ounce Wednesday, Bloomberg reports.

February gold futures traded at $1,248 on the Comex Thursday morning.

Rising stock prices will take away some gold demand, and heightened regulation will detract from risk-taking, the analysts say.

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