Tuesday’s steep selloff breaks gold's five-day winning streak. The yellow metal had hit a three-week high to $1,328 per ounce as tensions mount between Ukraine and Russia.
But, according to “Talking Numbers” contributor Richard Ross, global technical strategist at Auerbach Grayson, the rout is providing a good buying opportunity, as the charts are doing something they haven't done in a while: flash a buy sign.
"There are some signs that make gold very attractive at these levels," said Ross. "I'm not a gold bug per se but I do like a nice chart and I think that's what we can see here with gold. It has a lot of things in its favor."
Pulling out his fundamentals hat, Ross also sees a weaker dollar, lower interest rates and volatility in the equity markets as tailwinds for bullion. And, he also notes that an overlooked technical indicator recently changed directions to a buy signal. Back in February 2013, gold's 50-day moving average moved below its 200-day moving average. At the time, gold was near $1,700 per ounce. By June, it was trading at $1,180 per ounce. The 50-day moving average remained below the 200-day moving average until last month, when they switched positions.
"In addition, the 200-day moving average is sloping higher," said Ross. "That's telling us both our short-term and longer-term trends are turning higher."
Ross thinks gold is headed toward a resistance level of $1,420 per ounce, though he sees a rocky road toward that level.
"It's not going to be a straight shot," said Ross. "Every time we get a little head of steam, we pull the rug out from underneath us in gold. But, I still think it's a good place to be as we transition from a period of strong seasonality in stocks into one of weak seasonality through the summer months."
CNBC contributor Andrew Busch, editor and publisher of The Busch Update, is not particularly optimistic about gold and sees it stuck in a range between $1,200 and $1,400 per ounce. He thinks market fears about Russia potentially invading Ukraine are out of proportion; he doesn't believe Russia wants to be saddled with Ukrainian debt in that outlying scenario.
"But, they want to exert influence over them, meaning the gas pipelines; they want to keep them open [and] they want to keep them flowing," said Busch. "So, unless Russia actually invades and then moves on to the Baltics states, I don't think gold's going to get much of a pop."
Instead, Busch said that gold should up on higher hourly earnings and hours worked in the U.S., and if the European Central Bank conducts a bond-buying quantitative easing operation in Europe.
"That would certainly help overall with gold because then you could begin to anticipate some inflation being developed through the printing of money," said Busch. "But, until those three things kind of hit, I think it's $1,200- $1,400 for some time."
To see the full discussion on gold, with Ross on the technicals and Busch on the fundamentals, watch the video above.