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Gold is doing something it hasn't done in 17 years

Gold bugs are having flashbacks of the late '90s.

But it's not Hanson or "Seinfeld" on their minds. Instead, it's the sobering realization that gold is about to do something depressing.

If gold were to close out the year right now where it is, it would be looking at its first back-to-back yearly loss since 1997. The precious metal is currently off almost 4 percent on the year. The surging dollar and lack of inflation has taken the shine off gold. But with so much going wrong, could now be the time to buy bullion?

"I think gold is headed straight down," said CNBC contributor Gina Sanchez, founder of Chantico Global. She sees a stronger dollar, economic optimism and rising rates ahead for the U.S. all conspiring to push the metal's price down. Add to that flat inflation in China and the potential of deflation in Europe and you have a recipe for cheaper gold.

"None of those things are going to support gold," Sanchez said. "You might get some firming in the physical markets but it's just not enough to combat the outflows in the financial markets."

The charts don't look much better.

"What we're seeing in the trend is that this can continue," said Ari Wald, head of technical analysis at Oppenheimer & Co. "We would be playing for lower gold prices. As pessimistic as sentiment has gotten, we think it becomes more pessimistic."

For well over a year, gold has been making a base, with support around $1,200 per ounce, according to Wald's charts. But with prices falling below that level, that may have failed.

"We see $1,200 now as resistance and we are viewing this as a resumption of the very long-term downtrend that started in 2012," Wald said. "Until gold can stabilize, we see downside risk to $1,000."

The $1,000 level is significant technically, not just because it's a nice round number but because it was strong resistance in the time between 2007 and 2009, said Wald.

"It was prior resistance for a few years in there and I think that might be a floor here," he said. "The worst-case scenario is gold can't stabilize and the trend continues lower."

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