Gold futures traded below $1,700 for two trading days last week. And in both cases, they closed above the psychological level. Thus, it is only logical to wonder if this price point will become a stable support level or just a pause before gold prices begin to decline.

The latest weekly gold survey shows that growing bearish sentiment among Wall Street analysts and Main Street investors indicates that gold will fall below $1,700 an ounce in the near future.

Sentiment has worsened over the past few weeks as investors expect the Federal Reserve to raise interest rates aggressively to lower inflation. Under these conditions, the real yield increased along with the US dollar, creating two main headwinds for the precious metal.

Last week, gold fell to almost a yearly low as the US dollar reached a major milestone: it reached parity with the euro for the first time in 20 years. Analysts say that although gold has fallen to $1,700, there has been no serious capitulation in the market.

According to Frank McGee, precious metals dealer at Alliance Financial, gold prices will continue to fall as more traders are forced to liquidate their unprofitable gold positions.

Last week, 16 Wall Street analysts took part in the gold survey. Among the participants, three analysts, or 19%, are optimistic about gold in the short term. At the same time, six analysts, or 50%, were bearish, while five, or 31%, were neutral.

In online polls on Main Street, 1,107 votes were cast. Of these, 441 respondents, or 40%, expect gold to rise this week. Another 458 voters, or 41%, said decline, while 208 voters, or 19%, were neutral.

Not only has bearish sentiment increased among retail investors, but participation in the survey has reached a monthly high, indicating that more investors are turning their attention back to the market.

Despite the strong bearish sentiment in the market, some analysts are not yet ready to give up the precious metal. Saying that gold should bounce as it is technically oversold.

Adam Button, chief currency strategist at Forexlive.com, said he is bullish on gold as markets anticipate a 100 basis point rate hike later this month. And they began to react to the aggressive move after the US CPI showed that inflation rose to 9.1% in June, a 40-year high.