"The big investors are starting to get out of gold and I know that a lot of the big macro hedge funds are actively thinking about when you start shorting the stuff," Ric Deverell, global head of commodities at Credit Suisse, told CNBC Europe on Thursday.
"The reason they [gold investors] loaded up to the gills is because everybody seems to view gold as insurance. The world economic system is starting to look more stable, so they are starting to turn that around."
However, Philip Silverman, managing director of Kingsview Management in New York, said the ETF sell-off was in response to the tumble in spot gold prices, rather than increasing risk appetite or the equity rally.
"As far as ETFs go, a lot of hedge funds have been burnt by holding gold in an environment where equities are going through the roof… The selling is much more of a reaction to what's going on with gold right now," Silverman said.
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Nonetheless, Deverell said market technicals mean the price of gold could plummet if it falls below $1,500.
"I think it bounces around where we are for a while, but if you move to the low $1,500s, you are going through some very interesting technical levels and I think it could fall very heavily."
"My big call is that in two or three years gold will be much lower than where we are now."
Silverman advised investors not to bet against gold, as central bank demand remains strong. The World Gold Council said last month that central banks gold purchases in 2012 were the highest for nearly 50 years, as banks sought to diversify their reserves.
"You don't fight the stock markets when the Fed is easing, so you wouldn't want to fight the central banks when they're buying gold, because they have deep pockets," he said.
SocGen's Dannesboe and Bhar said that in contrast to their gold outlook, they are increasingly bullish on palladium.
"The outlook for the palladium price is increasingly turning bullish on a combination of a negative supply shock, as the Russian government stockpile is nearly depleted, and a recovery in demand growth from auto catalysts and electronics," they said.
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Dannesboe and Bhar predict palladium prices will rise on average to $850 in the fourth quarter of 2013, before extending gains to $1,000 by the end of 2014.
"We expect the palladium/gold price ratio to trend higher at pace over coming quarters and years, and see scope for palladium to have outperformed gold by at least 30 percent by late next year."
- By CNBC's Katy Barnato