Goldman Sachs downgraded its 2013 price target for gold and advised investors to short the precious metal, in a commodities report out on Wednesday.
"Despite resurgence in euro area risk aversion and disappointing U.S. economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning," said Goldman Sachs analysts Damien Courvalin and Jeffrey Currie in the note.
The analysts cut their gold forecast to $1,450 per ounce for 2013 and $1,270 for 2014, the second cut in their price target this year.
"With our economists expecting few ramifications from Cyprus and that the recent U.S. slowdown will not derail the faster recovery they forecast in the second half of 2013, we believe a sharp rebound in gold prices is unlikely. Given gold's recent lackluster price action and our economists' expectation for higher U.S. real rates, we are lowering our U.S. dollar-denominated gold price forecast once again."
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"As a result, we recommend closing the long COMEX gold position that we first initiated on October 11, 2010 for a potential gain of $219 per ounce, with the risk reversal overlay expired on March 25. While there are risks for modest near-term upside to gold prices should U.S. growth continue to slow down, we see risks to current prices as increasingly skewed to the downside as we move through 2013," Courvalin and Currie said.
UBS also cut its 2013 outlook for gold this week to $1,740 from $1,900. However, the bank held its 2014 forecast steady due to uncertainty regarding the euro zone and a possible end to the U.S.'s ultra-easy monetary policy.
"Gold has faced many challenges already in 2013: market concerns on the longevity of the Fed's quantitative easing, a rotation into equities, benign inflation and the focus on better economic growth are valid threats to gold's upside potential. A stronger dollar also poses a challenge… These realities warrant less aggressive price expectations," UBS analysts wrote on Tuesday.
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Spot gold prices have fallen six percent year-to-date, while the MSCI Gold Index has fallen 21 percent. On Wednesday gold traded at $1,579 per ounce.
Gold bulls however have stuck to their guns in the face of several downgrades for the metal.
Philip Silverman, managing director of Kingsview Management in New York, advised investors not to bet against gold last month because central bank demand remains strong. According to the World Gold Council, 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," Silverman said.
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--By CNBC's Katy Barnato