Institutional investor George Soros said gold has been destroyed as a safe-haven asset, but expects continued central bank buying to support prices, the South China Morning Post reported.
"Gold was destroyed as a safe haven, proved to be unsafe. Because of the disappointment, most people are reducing their holdings of gold," Soros told the newspaper in an interview published at the weekend.
"But the central banks will continue to buy them, so I don't expect gold to go down. If you have the prospect of a crisis, you will have occasional flurries or jumps. So gold is very volatile on a day-to-day basis, no trend on a longer-term basis."
Soros, who called gold "the ultimate bubble" in 2011, slashed his position in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, by more than half to 600,000 shares in the fourth quarter of 2012 from 1.32 million in the third quarter.
The price of spot gold has fallen nearly 6 per cent so far in 2013, after a 12-year rally, as investors searched for better investment returns elsewhere including equities. In contrast to gold, the S&P 500 stock index is up almost 9 percent this year.
On Monday, gold stood at $1,578 an ounce, regaining some ground after hitting a 10-month low of $1,539.74 last week.
Soros said gold has "disappointed the public, because it is meant to be the ultimate safe haven."
"But when the euro was close to collapsing in the last year, actually gold went down, because if people needed to sell something, they could sell gold...So gold went down together with everything else," he was quoted as saying by the newspaper.