Gold prices, which have been on a tear for most of 2016, appear to have peaked, according to one top market watcher.
This year's 24-percent rally in gold "was completely justified. It was kind of a perfect storm for gold," said RBC Capital Markets Commodity Strategist Christopher Louney on CNBC's "Futures Now" recently. Fears stemming from the U.K.'s vote to exit Europe, Federal Reserve policy jitters and worries about the economy appear to have run their course, Louney said.
"We had Brexit, we had uncertainty, we had , we had very low yields, we had so many things going on in the markets that were in gold's favor," the analyst explained.
Gold, a precious metal often seen as a safe haven for investors, has been losing its luster even since those risks and situations began to fade. Since hitting its high for the year on July 6, gold has dropped four percent.
"The majority of this rally was driven by two fundamental factors and they were both investor demand. So in our view, it really has been a one-legged rally," said Louney.
The bearish view comes as a crucial Fed meeting approaches this week. Most investors expect the central bank to put off raising rates, but RBC warns investors not to expect continued loose monetary policy to boost bullion.
"We think no hike is already priced into gold. We certainly could get ten bucks, maybe 15 bucks, maybe 20 bucks, but we are not going to retest the $1365 high that we saw earlier this year," he said.
To meet RBC's latest forecast, gold would have to fall five percent from current levels in the next three months.
"Our full-year average is $1258 for 2016," said Louney. "That's admittedly the unpopular view of the market right now. But we really do see downside from here."