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Why traders are betting on a big bounce for the metals

The metals are getting more precious.

Gold and silver hit multimonth highs Thursday, as industrial metal copper rose to the highest level since the beginning of the year. This as the dollar continued to lose value against other major currencies.

Notably, it is a move that is strongly counter to the trend seen over the past few years, whereby metals prices have fallen mightily as the dollar has soared.

"We're seeing a massive short-covering rally right now, that's all it is," commented David Seaburg, head of equity sales trading at Cowen and Co., in a Thursday "Trading Nation" interview.

Read MoreThe surprising new case for gold

"You're going to have an opportunity here, maybe for the next month or two, to make some money here near term on the upside" for metals, and to the downside for the dollar.

Still, Seaburg warned that given the macroeconomic environment, "it is a structural short still; you lay them back out, they're going to go a lot lower."

However, Larry McDonald of Societe Generale sees the same trade as potentially having more room to run.

It is because the market is starting to price in less tightening from the Federal Reserve that "you're seeing a major reversal in gold miners and commodities," McDonald said Thursday on "Trading Nation." This because the dollar's rise has largely been driven by expectations the Fed would raise rates even as other central banks' policies were still in stimulus mode.

"We're probably in the mid-to-early innings of this game right now," the macro strategist said.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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