Gold prices bounced back Thursday after hitting their lowest levels of the year earlier this week. Get set for another decline, according to one technician.

The grim setup for gold is shown in the charts, Todd Gordon, founder of TradingAnalysis.com, told CNBC’s “Trading Nation” on Wednesday.

“From 2010 we’ve traced a beautiful five-wave decline down in gold, we’ve rallied back and all of a suddenly everybody was very bullish on gold,” said Gordon, tracing the precious metal’s path since the turn of the decade. “But, did we just get rejected around the $1,400-$1,500 level? I’m starting to see a little bit of hesitation.”

Gold prices have seen a steady decline since a 2011 peak as the bull market stretched on and riskier asset classes found favor over safe havens. Prices hit a high of $1,900 in August 2011, 44 percent above current levels.

Prices have declined 1 percent so far in May, setting up for its third negative month in five. The precious metal has dropped as another safe haven asset, the U.S. dollar, found new life. The DXY U.S. dollar index has risen 0.7 percent over the past three days.

“That dollar is finally starting to search for a bottom and I’m looking to be a buyer of the dollar so as much as I want to see gold go up in a risk-aversion flight, we just got rejected,” said Gordon.

A rising dollar isn’t the only market factor hurting gold right now. The rising rates environment is also putting pressure on the commodity, said Boris Schlossberg, managing director of FX strategy at BK Asset Management.

“Gold really suffers when yield rates start to rise, because gold offers no carry whatsoever,” said Schlossberg.

Bond yields have swung higher this year as the Federal Reserve signaled a more hawkish turn on monetary policy. The central bank is expected to raise interest rates at least two more times this year.

“There is always an exogenous case to be made,” said Schlossberg. “If we have some sort of geopolitical risk … gold is always going to be sort of a harbor of safety and could have a sharp spike higher.”

Geopolitical risk with Iran could give the gold market a jolt, he said. President Donald Trump has threatened to pull out of the deal which limits Iran’s nuclear capabilities – he faces a deadline on May 12.

“Apart from that, if you sort of look forward over the next 12 months and you assume that we’re on a slow but steady path upward in rates it really presses downward on gold,” said Schlossberg. “Unless you get some sort of a geopolitical risk move here, it is not a buy.”

Gold prices rose by 0.8 percent to $1,315.70 an ounce on Thursday morning. It reached a session high of $1,319 earlier in the day, its highest level since April 30.

Disclaimer