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Gold is suffering its longest losing streak since last May—but some smell a buying opportunity

Gold fell to a one-month low of $1,201.2 in Thursday trading, as the metal sunk for the eight straight session.

That means that bullion is in the midst of its longest losing streak in nearly a year.

The last time that gold had such a long string of losses was in May, as the U.S. dollar index gained ground, and market fear as measured by the CBOE Volatility Index slid.

After more than a week of falling prices, some strategists see the potential for a gold turnaround, even in the face of the rising likelihood that the Federal Reserve will increase its federal funds target rate in the policy statement set to be unveiled next week.

"Gold has come under pressure in the run-up to the next Fed rate hike. While tighter monetary policy is not bullish, inflation and a range of uncertainties, including European elections and protectionism should support the yellow metal," Bank of America Merrill Lynch commodity strategists wrote in a note to clients Thursday morning, forecasting a rise to $1,400 per ounce by year-end (implying a 16 percent rise from current levels).

Rising interest rates tend to depress the price of gold, as they raise the value of the U.S. dollar as well as make bonds look better in comparison to the nonyielding metal. And it's typically an asset that investors flock to in times of stock market anxiety, which is on the ebb at the moment.

Gold's sensitivity to interest rates is at "multi-multi-year highs," according to Larry McDonald, head of global macro strategy at ACG Analytics and editor of financial newsletter "The Bear Traps Report." And he'd be buying these gold-tracking mining stocks at these levels as a contrarian trade.

McDonald doesn't believe the Federal Reserve will go through with the three interest rates hikes that are expected this year. While he sees the Fed indeed raising rates in its March meeting, he believes it will be slower to hike after that.

"You want to buy fear," McDonald said Wednesday on CNBC's "Trading Nation." "You want to buy gold miners into rate hikes. It's a good strategy, and we think it'll work this year," he said.

Once the Fed reduces its hiking schedule, "that's where you'll get your 10, 20, 30 percent pop in gold miners."

Taking the other side of the trade, Boris Schlossberg, BK Asset Management's managing director of foreign exchange strategy, said he's taking Fed chair Janet Yellen's hawkish tone "at its word."

"I think the Fed is on a path to hike rates three times this year. They've been very, very consistent about that. And if that's the path, gold goes down," Schlossberg said.

"I think gold is in a secular bear market, and it's a sell-the-rally trap," he added.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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