The sell-off continued in April 2013. Gold saw a sharp drop on concerns that struggling euro zone country Cyprus would have to sell excess reserves of the precious metal to raise about $522 million to help finance that country's $13 billion international bailout.
Bullion took another hit, falling to a six-month low, on Dec. 20 after the Fed's decision to scale back its bond-buying stimulus prompted another sell-off. A drop in exchange-traded fund holdings showed investors had increasingly lost faith in bullion as a hedge against inflation and as an alternative investment. Many analysts see the buying of physical gold in China and India, which is still relatively strong compared to historic rates, as the only upside for the price.
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Roger Nightingale, an economist at RDN Associates—who was bearish on gold throughout 2013—argues that it could fall even further.
"I think it could go to $500 quite easily before it turns up again," he said. "It has no yield, all I'm doing is buying it on the basis that somebody else would want to buy it at a higher price in the future. And once you've got a significantly long downtrend the majority of people stop thinking that somebody's going to bail them out at the higher price."
—By CNBC.com's Matt Clinch. Follow him on Twitter