Gold needs to hold a critical support level for several trading sessions before a bottom can be consolidated, or prices could head even lower, said Todd "Bubba" Horwitz, chief strategist at bubbatrading.com.
"The $1,280 level has to hold, and $1,280 could be $1,270, $1,285, somewhere in that area. That's got to hold for a couple of days and do a little consolidating here. If that doesn't hold, then we're bringing $1,260 and $1,240 into play, but if we can hold here, then I would be willing to call this a bottom and I think we can go higher from here," Horwitz told Kitco News.
Horwitz added that a "big spike up" may not mean the end of the selloff, rather, it could potentially signal more selling to come.
Despite gold's price weakness of late, Horwitz is still sticking to this $1,400 an ounce gold call by the end of year.
"I think that we have a very solid chance to get [to $1,400]. I think there's going to be some selling coming into the equities, I think there's going to be some nerves out there, and I think people are going to go back into the yellow metal," he said.
On the recent selling of $400 million worth of gold by Venezuela's central bank, Horwitz said that investors should not read this as a sell signal, as Venezuela's actions had very little market impact.
"I think they're selling because they need the money. I think that they're running out, they have nobody to tax, they have no more money to get anywhere, they can't sell any oil, so they got to take some money from somewhere so they're going to liquidate their gold," he said.