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After gold’s longest losing streak in 20 months, some spot a buying opportunity

Gold logged its ninth straight losing session on Friday, for the metal's longest string of declines since July 2015. And some say the drop spells opportunity.

"We think right now could be a good entry point for gold," RBC Capital Markets commodity strategist Christopher Louney said Friday on CNBC's "Power Lunch."

In prior months, Louney has staked a bearish view on the metal, arguing that gold had been driven higher by investor demand which would eventually dry up. This call has proved prescient; after peaking above $1,335 in July 2016, the metal briefly fell below $1,200 in Friday trading.

At this point, however, he argues that gold has become all too unloved.

Given the high likelihood of the Federal Reserve hiking rates next week, "gold is behaving exactly how it should," he granted. Yet "there's very little downside" from these levels.

On the other hand, its potential upside could be great, simply "given the number of risks we think still exist in the market," Louney wrote to CNBC.

In other words, his view is that gold could potentially rise much more than it could fall, making for an attractive trade setup.

David Seaburg, head of equity sales trading at Cowen, advises holding off on buying gold until the actual Fed report is released.

Looking at the GLD gold ETF, which closed Friday trading at $114.72, Seaburg predicted that after the actual hike announcement, "you probably get more of a pullback, maybe around the $113-ish level."

At that point, traders can start to buy in, committing more to the position if it gets down to $112. From that level, traders can hold on to the ETF until it rises to $117, at which time "you exit that trade."

This is not to say that Seaburg sees a big gold turnaround ahead.

"It's not an investment — it's totally a trade," he added Friday on "Power Lunch."

Despite its recent drop, gold is still clinging to meager gains on the year.

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Brian Sullivan

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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