Gold is due for a pullback — one that could be the start of a serious weakening in bullion prices, says MarketWatch’s Mark Hulbert.

“Excitement has grown markedly over the last couple of sessions, and now stands at close to the fever pitch that prevailed in late April,” shortly before the gold market tumbled, Hulbert writes. “Consider the average recommended gold market exposure among a subset of short-term gold timers tracked by the Hulbert Financial Digest … This average currently stands at 67%, which is within shouting distance of the 73.7% level [it] rose to in late April, which was a several-year high. The wall of worry that the gold market has been climbing in recent weeks is close to disintegrating, in other words.”

Whether the pullback will be a short term one or the beginning of a big gold downdraft is unclear, Hulbert says. It depends largely on how gold traders react to the initial pullback. If investors dump gold and head for the exits, he says, that could actually be a good sign, enabling the wall of worry in the gold market to be rebuilt. If gold traders remain bullish, however, that could be a bad sign. “Contrarians believe stubbornly held bullishness to be a particularly bad sign, suggesting that more downside action is necessary before a sustainable rally can once again begin in earnest,” he says.