In spite of see-sawing following Friday's non-farms report, gold looks poised for its first annual fall in 14 years, with bullion prices down 26 percent since the start of 2013.
The price of gold has soured since the turn of the century, with the precious metal viewed as both a hedge against inflation and a safe bet in challenging economic climes. Prices rose 872 percent between 1999 — the last year gold clocked up an annual fall — and 2012, from $172.13 per ounce to $1,674.34, according to data from Reuters and the World Gold Council.
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However, gold has been hard hit this year by fears of an imminent end to the U.S. Federal Reserve's massive stimulus program, as well as by the strength in equities and the rosier global economic picture. The metal traded at $1,234.96 per troy ounce on Friday, down 26 percent since the start of the year and more than 1 percent lower than at the beginning of December, despite paring some losses during the day.
"Our view is that gold is to a very large extent a QE (quantitative easing) story, at least for the time being… About two-thirds of the decline of gold this year can be traced back to three trading days related to Fed's announcement on tapering," said UBS strategists Stephane Deo and Ramin Nakisa in an asset allocation report this week.
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In common with Goldman Sachs, the Swiss bank forecasts the price of bullion will continue to decline next year, and has downgraded its call on gold to "underweight". UBS predicts gold prices will average $1,200 in 2014, but could drop as low as $1,050.
"The more upbeat outlook on the global economy, the reduction of tails risks, and the growing appetite to take on more risk suggests that safe havens like gold will become even more unfashionable up ahead. The yellow metal's performance this year highlights the extent to which gold has lost its allure and implies that it will take a very substantial change in the macro picture for this to be reversed," said UBS analysts Joni Teves and Edel Tully in a report on precious metals.
"As 2013 comes to a close, the New Year will likely tempt investors to further move out of safe havens — and especially out of gold — into other assets. Gold has become old news, and investors are likely to be eagerly searching for new places to put their cash to work," they added.
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Goldman Sachs sees gold on the COMEX exchange falling to $1,230 over the next six months, before falling still further to $1,110 over the next 12 months.
In the near-term, gold could drop to $1,175, Anthony Grisanti of the New York Mercantile Exchange told CNBC.
"I don't see a lot that is going to take this higher right now. $1,175 is a very good number on the downside. To me it is like white water rafting right now, no matter how hard you paddle the water's just going to take you where it wants. I think that gold is going to $1,175 within the next few weeks," he said this week.
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—By CNBC's Katy Barnato