The U.S. dollar posted its biggest one-day loss since 2009 on Thursday, falling more than 2 percent after the European Central Bank announced lighter monetary stimulus measures than expected, which boosted the euro but hurt the dollar. However, gold only saw a slight bounce, which may have left some investors wondering — where's the gold rally?
Since gold tends to trade inversely to the U.S. dollar, a notable drop in the currency would translate into a boost for the yellow metal. But Andrew Burkly, head of portfolio strategy at Oppenheimer, said the big currency move mainly had to do with adjusting for short positions.
"It's really a positioning adjustment," Burkly said Thursday on CNBC's "Trading Nation." "There's such a big short position in the euro that really anything the ECB did this morning was going to be a bit of a disappointment."
Gold, which is widely considered an inflation hedge, has yet to become attractive to investors, Burkly said. Thanks to low oil prices and sluggish economic data, inflation doesn't look like it's going to be picking up anytime soon, he said.
The beaten commodity also tends to act as a safe-haven investment in times of volatility and uncertainty. Although the CBOE Volatility Index, a commonly used "fear gauge" for the market, saw a sharp jump on Thursday, Burkly said that still isn't enough to make investors move into gold.
"On a short-term basis you're going to have those correlated moves, but I think people have gotten burned by that quite a few times," Burkly said. "The trend in gold just continues to go down and down, as the trend in inflation continues to go down and down as well."
According to technician Craig Johnson of Piper Jaffray, that downtrend in gold could take prices as low as $900 per ounce, the next level of technical support.
The fact that gold didn't see a bigger bounce, Johnson said, is indicative that a longer-term disruption isn't happening in the market.
"The trend is clearly not your friend on this particular chart," he said Thursday on "Trading Nation." "I remind the gold bugs that the average price of gold over the last 50 years is just under $500. So I think there's more downside yet to be had."