As gold exchange traded funds (ETFs) celebrate their tenth birthday this month, investors are heading for the exit doors as speculation about an end to the Federal Reserve's loose monetary policy curb the precious metal's rally.
"What we're seeing at the moment is probably that we're at an inflexion point, where there's been some profit-taking in gold," Nik Bienkowski, co-chief executive of Boost ETP, which tracks the physical price of gold, told CNBC on Thursday.
"With improving sentiment in the equity markets, perhaps some that were over-invested in gold have sold part of their gold portfolio and invested in equities."
According to Reuters, which tracks eight gold-backed exchange traded products (ETPs), funds suffered their biggest ever outflows this quarter, falling by 7.2 percent from the start of the year to 70.66 million ounces. Meanwhile, holdings at New York's , the world's largest gold ETP, are down by 12 percent to 39.3 million ounces.
Bienkowski added that anecdotally he had heard that many hedge funds have sold off holdings. "Perhaps they're waiting for another fall and then they can buy back in," he said.
The price for gold was around $330 when the first gold ETF fund launched on the ASX (Australian Securities Exchange) in March 2003. Gold has since rallied by 385 percent, and 45 gold ETFs have sprung up across the globe. Spot gold traded close to a $2000 peak in October, but has since tanked 10 percent.
(Read More: Even Another Cyprus-Style Crisis Can't Save Gold)
While equities have risen in recent months, gold has traded in the opposite direction. Bienkowski describing the two as negatively correlated.
"Because gold has few industrial uses it is "non-correlated" with economic growth or other financial assets," Adrian Ash, head of research, at BullionVault said in an analysis note.
"That's money-manager-speak for saying gold's price moves independently of where the stock or bond market heads. Which makes it a useful hedge if you're anxious about a long-term decline in equities. It does also mean gold may tick lower if the stock market rises."
—By CNBC.com's Matt Clinch