KITCO NEWS -- The gold market was in backwardation this week and, according to one research director, it marked the most prolonged period in history that it has been in this state.

"Right now, what's been happening [in gold] lately is almost unprecedented," said Mike McGlone of ETF Securities, adding that this is a sign that the market is bottoming out.

According to McGlone, backwardation is a sign of strong physical demand in the market. "It's almost the perfect storm for gold," he said. "This whole process is the market bottoming. The question is how long will it take?"

February Comex gold futures were last quoted down 1.2% at $1,056.60 an ounce. Looking ahead to the imminent rate hikes in December, or so the market seems to think, McGlone says there is potential of a "misfire" by the Federal Reserve. Looking at the data, particularly declining retail sales figures, he said the Fed is taking a big risk to raise rates as U.S. economic data remains mixed. "The Fed expects that to shift up, and that's a tremendous risk. Last time they tightened, these trends were moving higher," he said. "That is very disconcerting."