Analysts expect a drop next year as well over and above the near 30% plunge so far in 2013 although the decline may not be as steep, and any uptick in the price movement will hinge on a revival of demand in India and China.
Spot gold remained marginally up at $1,204.70 an ounce by 0724 GMT, still down 37% since scaling an all-time peak of $1,920.30 in 2011. US gold futures also inched up marginally to $1204.2 an ounce.
While uncertainties about the tapering earlier this year and the subsequently announcement of the partial rollback of stimulus measures from January kept investors on edge, muted demand in largest consumer India, following an official crackdown to trim the trade deficit, knocked the shine off the precious metal, said Geojit Comtrade director CP Krishnan.
Further, green shoots in the US economy have propped up equity, prompting investors to opt for risky assets, shunning the safe-haven appeal of the precious metal, particularly in times of low inflation in that country, he added.
An end to the Fed's quantitative easing programme hurt gold, as the precious metal's rally in recent years was aided by a low interest rate environment, which prompted investors to shift to haven assets like gold to beat inflationary pressure.
I see support level for gold at $1,180 per ounce. Any uptick in prices will have to be driven by India and China. A strong appreciation of the rupee can potentially bring Indian buyers back to the market and help swing the fortune for gold. If prices move up beyond $1,262 per ounce next year, bullish sentiment will kick in. However, I believe there are greater chances of bearish attitude persisting in 2014 as well, said Krishnan.
US stocks are witnessing a good run this year, with the S&P 500 index heading for its best annual advance since 1997, while Japanese stocks are a close second.
Analysts believe gold will continue to suffer until global equities see a correction and Asian demand for the precious metal picks up.
Already, several brokerages such as Goldman Sachs, BNP Paribas and Societe General have forecast gold prices to fall below $1,150 next year.
However, analysts don't expect prices moving back to the $1,000 per ounce level, apprehending that miners would, in that case, shut operations and curtail supplies to drive up prices.
Indian authorities intensified a crackdown on gold imports since June this year after imports in the first two months of this fiscal exceeded a record 300 tonne, worsening fears of a runaway current account deficit.
Gold imports in India dropped 79% in the three months through September to $3.5 billion from the quarter before following a series of official crackdowns, including a hike in import duty on the precious metal to 10% from 8% and norms mandating that 20% of the gold imported must be kept aside for re-export.
Even the imports during the October and November period, when festive and marriage season demand usually drives purchases from overseas, crashed to just $2.2 billion, compared with $12.1 billion a year before.