HSBC and Barclays both cut their 2012 gold price targets by over $100 an ounce after the metal posted a gain of 10 percent last year to extend its run to an 11th consecutive year. It was, however, its smallest annual gain in three years.

HSBC's chief commodity analyst James Steel slashed his 2012 forecast to $1,850 an ounce from his previous target of $2,025, citing a weak euro, liquidation related to equities' losses and lackluster physical demand from emerging markets.

Steel also kept its 2012 silver view unchanged at $34 an ounce but he cut his price forecasts for platinum and palladium.

Bullion has appeared to lose its investment appeal as a safe haven after moving in almost virtual lockstep with the euro and equities in the last two months.