Gold's tumble is far from over: Traders

Gold simply cannot catch a break. After spending the year bouncing around five-year lows, the commodity hit a new bottom for that time frame Thursday, trading at about $1,087. And according to some traders, the worst is yet to come.

"The long-term trend is indeed lower," Ari Wald of Oppenheimer said Thursday on CNBC's "Power Lunch." "Gold has been making lower highs for a number of years now."

Wald said gold and other commodities that are priced in U.S. dollars will continue to be hit hard by the strengthened currency. The dollar rose to one-week highs on Thursday, and has gained 8 percent year to date.

According to Wald's chart of the SPDR Gold Trust ETF (GLD), gold is just catching up to the trend of the 200-day moving average, which has been substantially lower in the past couple years.

"The most recent breakdown is really just confirmation of what's been in the charts for some time now," Wald said.

Wald said GLD, which is currently trading around $104, could drop as low as $99. If the commodity sees a bounce to $108, Wald said investors should sell at that resistance level. GLD has fallen more than 8 percent year to date.

As the Federal Reserve gets closer to a rate hike, gold will drop even further, said Erin Gibbs of S&P Capital IQ. Gibbs said not only will gold look less attractive compared to bonds, it will become more expensive for foreign investors, as the dollar rises with interest rates.

Physical demand for gold has also declined, Gibbs said, as large commodity buyers such as China have cut back.

"Investors in China and India have been buying a lot of it up until the last two quarters. And we actually saw a 26 percent drop in Chinese demand last quarter," she said Thursday. "So all things considered, it looks like gold is going to continue to go down."

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