After nearly a decade of bullion broadly tracking stocks, as represented by the S&P 500 index, this year the opposite relationship materialised as share prices rallied.
While the S&P index has gained 10 percent so far on the year to date, gold is sitting firmly in bear market territory. After a brutal sell-off in April, it is nursing an annual loss of around 24 percent.
The S&P and spot gold showed a positive correlation between 0.6 and 0.9 from 2004 to 2012, after being negatively related between 1990 and 2003, according to data from Standard Bank Research.
"What happens to equities will play a bigger role than it did in the past six or seven years," Standard Bank analyst Walter de Wet said. "The inverse correlation (between gold and equities) will strengthen as people look at what interest rates will do, what the dollar will do."
Analysts polled by Reuters say U.S. stocks will continue to rise this year, surpassing record levels hit by the Dow Jones Industrial Average and the S&P 500 earlier this year.
BULL RUN FADES
Until the end of 2012, gold had a 12-year long run of gains, benefiting, as a non-yielding asset, from negative interest rates linked to multiple rounds of quantitative easing.
Low real interest rates and liquidity injections into the banking system also lifted equity markets and kept the dollar under pressure.
Nearly six years on from the introduction of loose monetary policy, signs that the Fed is looking at scaling back asset purchases are viewed as negative for gold, but not necessarily so bad for equities.
"The high-consensus view of dollar strength in the light of QE being scaled back should be a stumbling block for gold, whereas the equity side should be resilient as (the easing) would only happen if the Fed believed the economy is strong," Willem Sels, head of investment at HSBC Private Bank, said.
"We hold a negative view on gold and a constructive view on equities."
In the past 13 years, gold has gone through a structural change, with investment gaining increasing importance as a source of demand. It accounts for 35 percent of global consumption currently, against just nine percent in the early 2000s, according to the World Gold Council.
"The growing importance of investors in the gold market has been the main reason why you had a change in correlation with other assets," Credit Suisse Global Head of Commodity Research Tobias Merath said.
The launch of physically-backed exchange-traded funds (ETFs) - investment vehicles which issue securities backed by physical metal - from 2003 has reinforced that change in correlation, analysts said.
"When ETFs launched, the real money managers shifted money into those funds as a portfolio diversification move, irrespective of what equities were doing," de Wet said.
"That was an asset allocation exercise that distorted the market and seems to have now run its course."
Total assets in gold exchange-traded products (ETPs) globally shrank by 32 percent to $96.2 billion as of the end of May, from $141.2 billion in 2012, the first such fall since their inception, BlackRock asset management data showed.
Gold has not only held a positive correlation with U.S. equities but outperformed them over the past 10 years.
The S&P 500 annual growth from 2003 to 2012 has been on average 6.7 percent, while gold has risen by a 17 percent average annual rate. But in 2013, the S&P Index has gained some 14 percent while spot gold has fallen more than 20 percent.
By re-establishing its traditional inverse relation with equities, gold may however benefit from its quality as a portfolio diversifier, analysts said.
"The reason we keep it is tail risk," HSBC's Sels said. "There are very few assets that protect you against it and gold is one of them. Other assets like bonds have lost their diversification power because yields are still so low."