Gold appears to be losing its lustre after more than a decade of gleaming in the gloom, but some traders think the weeks ahead might actually prove to be a buying opportunity for those with the stomach for a bumpy ride.
Almost every global measure points to a prolonged drop in the price of the precious metal, traditionally used as a safe haven when all other investment avenues appear too risky.
"We have seen a lot of selling pressure for sure," said Guarav Kashyap, the head of the Dubai Multi Commodities Centre (DMCC) desk at Alpari, a foreign exchange trading firm. "Definitely there is a lot of consolidation but there are some factors in the market that say, 'perhaps the price is bottoming out'."
Mr Kashyap and a host of other traders on the DMCC who specialise in gold futures, think the price will not dip to historic lows but will hover around US$1,530 a troy ounce to $1,550.
"I think gold at this price will present a real entry opportunity for some traders," Mr Kashyap said. "I mean, I don't see it going down into the lower $1,500s or even into the $1,400s as some are saying. I just don't think the economic picture is good enough to support that."
Gold traditionally sinks in value as economies improve as it is no longer needed as a haven investment.
Nevertheless, there has been a lot of selling in the gold market of late.
The biggest exchange-traded gold fund in the world, the SPDR Gold Trust, sold off more than 12 tonnes last Thursday leaving it with 1,258.40 tonnes, the lowest level since August. The fund sold off every day for five trading days in total, its longest negative streak since 2004.
The sentiment was stoked by a gold market report from Goldman Sachs last week. Goldman said that the gold cycle, which has been in the ascendant for the past 12 years, had turned, meaning that the bank expects no major gains from now on.
There may well be ups and downs as funds rebalance, but overall, the report claimed, the trend will more than likely be downwards.
Gold has lost 5.1 per cent of its value this year as the global economic outlook has improved and share prices have advanced around the world.
"The turn in the gold cycle has likely already started," Goldman analysts wrote in the report. "The latest collapse in gold ETF holdings stands in sharp contrast to our assumption that ETF positions were likely driven by longer-term allocation rather than short-term trading."
Credit Suisse agreed with the Goldman view in its own analysis also published last week that said "An inevitable unwind of gold's 12-year bull market has begun".
Some of the wealthiest investors in the world appear to agree with the Goldman view having reportedly cut their holdings in gold funds.
"The rush into risk assets in recent weeks appears to have been fuelled by the expectation that China and Europe have bottomed and that the US has avoided recession and will re-accelerate," said James Dailey, who manages $215 million (Dh789.6m) at Team Financial Asset Management in the United States.
Economic growth in China, is also expected to accelerate this year while US durable-goods orders climbed 1.9 per cent in January, the most in a year. Both sets of data indicate a positive outlook for the global economy.
Gold closed the week at $1,576.24.
* With Bloomberg News