This challenge is part of Fortnite's 8-Ball vs Scratch Overtime Mission. To find the said gnome, you just have to go to the west side of the map, on the coast between Sweaty Sands and Holly Hedges. There you'll find the little gnome lost in the middle of a field of flowers between a fancy view, a wooden hut and a big house.
Map
Exact location of the gnome
The gnome will appear at the location shown in the capture above once you unlock the challenge in your mission.
Fancy View
Wooden Shack
Big House
We recommend the Team Rumble mode to achieve this challenge, especially during the week following its release. It'll reduce your chances of running into warring enemies as soon as you land.
