Gold prices are looking even more vulnerable after April's price crash, as rampant inflation expected from successive rounds of monetary easing fails to materialise.
The idea that record-low interest rates would damage paper currencies and boost inflation was a key factor pushing gold to record highs in the wake of the financial crisis.
Ultra-loose monetary policies are still in vogue, but gold prices have slid nearly 20 per cent since the start of the year and are on track for their biggest quarterly drop in more than 15 years.
In recent months, the Bank of Japan has unveiled its largest ever stimulus programme while both the European Central Bank and the Reserve Bank of Australia have cut interest rates to record lows.
In the United States, despite hints that its quantitative easing programme may be nearing an end, the Federal Reserve is still pumping US$85 billion a month into mortgage-backed securities.
While inflation pressures have remained contained, stock markets have hit multi-year peaks in Japan and Europe, with record highs on Wall Street.
"What has occurred in Japan and elsewhere has in effect made the opportunity cost of holding gold greater than it was," Credit Suisse analyst Tom Kendall said.