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Gold is tumbling, but one trader sees opportunity

With bullion recently hitting a three-week low of $1,257, one commodities trader is adamant that the charts are signaling sunshine on the horizon for gold bugs.

Jim Iuorio, managing director of TJM Institutional Services, is undeterred by what's been a volatile June for gold as he believes the commodity will enter into a long-term uptrend swing.

"I'm a longer-term bull in gold and if you look at the long-term chart the trend is still higher," Iuorio said Thursday on CNBC's "Futures Now." "What the Fed said yesterday is disconcerting to the market, and that's why the dollar rallied so hard."

The Federal Reserve raised interest rates for only the fourth time since the financial crisis, which was expected. However, Fed Chair Janet Yellen took a decisively more hawkish tone despite the fact that inflation has fallen behind estimates.

Iuorio feels deteriorating data will soon pull dollar prices down and, if gold stays above $1,235, then the longer trend is ultimately positive for the yellow metal. Historically, the dollar and gold are inversely correlated as a fall in dollar prices increases the value of other currencies. Such a move drives demand for commodities, like gold, as investors seek alternative assets to invest in.

However, Iuorio warned that more hawkish rhetoric could indeed deter his thesis.

"I'm going to be wrong if they keep that talk up," the trader said. "Gold's going to go lower. If it settles below $1,230, that's going to change me into a bear."

That said, Iuorio doesn't believe the Fed can continue with its hawkish tone and therefore feels confident in where gold prices are heading.

Lastly, another factor for gold prices in the near term could be India.

Bob Iaccino, of Path Trading Partners, noted on "Futures Now" that a tax on the precious metal is slated to go into effect at the end of the month in that country. This could cause local jewelers and private citizens to rush into the market and purchase gold in bulk before the tax comes into play, which would also help drive prices higher.

Gold settled 1.5 percent lower on Thursday.

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