If gold prices fall below $1,250, the downward move could set off a fresh round of selling on Wall Street, veteran trader Art Cashin told CNBC on Wednesday.
"Gold, which got clocked pretty good yesterday, is weak again today," Cashin said. "And it better hold on to $1,250, because that may bring out some extra selling if it violates there."
Another important barometer of fear to monitor was yields on 10-year Treasury notes, which dropped Wednesday to a new 2014 low, Cashin added. The move seems more like a "curiosity" than a boon for bond investors, he said.
"It's not bad," said Cashin, the director of floor operations for UBS at the New York Stock Exchange. "People may have to spend some time interpreting why the 10 year looks like it's going lower and whether that has deflationary aspects to it. In the longer run, it should be good, particularly for mortgages and housing."
He added: "But for now it's not helping a great deal. It's more of a curiosity."
Read MoreTreasury yields dip to new 2014 lows
Yields on 10-year Treasury notes—a benchmark that affects mortgages and lending rates—fell to a 10-month low on Wednesday at 2.44 percent as stocks traded in a narrow range around record highs.
Cashin, who frequently tells stock market investors to monitor action in Treasurys, attributed the rally in bond prices to investors "caught up in a slightly bigger world picture" as they watch monetary policy decisions in Japan and Europe.
—By CNBC's Jeff Morganteen.