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This is a new opportunity to buy gold: Technician

For the last three years, it's been nothing but heartbreak for gold bugs. But according to one top technician, now is the opportunity to buy bullion.

"We've seen a long downtrend in gold and it looks to me that it could be coming to an end," Carter Worth said Friday on CNBC's "Options Action." Gold has been in a precipitous decline since 2011, down 4 percent in 2015 and on track for its longest yearly losing streak since 1997.

Read MoreGold slips on higher shares, soft US jobs data curbs decline

Looking at a very long-term chart of gold, Worth pointed out that the precious metal has hit a critical technical level. "If you were to draw a line along the peaks at or near the highs since 2011, we've flirted with this downtrend line three or four different times," he added. "Any type of [continued] strength will do one thing: it will start to move us above this downtrend line that's been in effect for three years."


Worth noted that the downtrend line also corresponds with gold's 50 percent retracement level dating back to 1975. "It's not random that we begin to move above this three-year downtrend just as gold reaches its 50 percent retracement level," said the head of technical analysis at Cornerstone Macro. Technicians often look to these retracement levels for shifts in sentiment.

For Worth, rather than pile into the commodity itself, investors could stand to profit more from gold-related stocks, specifically the gold miners. "Gold is halfway back from its low but if you look at gold miners [they] are at the all-time lows," he said. The gold miners ETF, the GDX, is down more than 18 percent in 2015. "We're going to play this off this all-time low and make a bet," he added. By Worth's work, the GDX should begin to catch up to gold.


Looking at the GDX, Worth said that at the very least we could potentially see a move to the downtrend line on the chart which comes in around $17. That's a nearly 13 percent move higher from the current trading price of around $15.

Gold miners were higher by more than 2 percent while gold prices were slightly lower midday Monday.

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    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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