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I suppose 'no pain no gain' doesn't apply here ? 

The turn in the gold price cycle is accelerating after a 12-year rally as the recovery in the U.S. economy gains momentum, according to Goldman Sachs Group Inc., which reduced forecasts for the metal through 2014.

The bank cut its three-month target to $1,530 an ounce from $1,615 and lowered the six- and 12-month predictions to $1,490 and $1,390 from $1,600 and $1,550. Goldman recommended closing a long Comex gold position initiated on Oct. 11, 2010 for a potential gain of $219 an ounce, analysts Damien Courvalin and Jeffrey Currie wrote in a report today..

In the past, the fearful have bought gold and driven up bullion prices to nearly US$2,000 an ounce in recent history.

What’s curious is that gold prices have ebbed, the bitcoin is not a viable alternative and yet fears remain. Even worse is that the debt and currency contagion has spread and the world’s four biggest economic entities – the U.S., EU, China and Japan – are printing and piling on debts with frightening speed.

So why isn’t gold at US$4,000 an ounce?

One bearish factor this week was Goldman Sachs’s downgrade of its gold price forecast for the second time in weeks. Commenting that “conviction in holding gold is quickly waning,” Goldman’s forecast is an average of $1,545 an ounce in 2013 and $1,350 in 2014.

Gold bugs claim that a conspiracy exists to dampen gold’s values. One of the theorists is Reaganomics guru Paul Craig Roberts, former Assistant Treasury Secretary.

This week he wrote: “Financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices. When gold hit $1,900, the Federal Reserve panicked because they realized with the dollar deteriorating so rapidly, compared to bullion prices, that soon it would also deteriorate its exchange value with other currencies. The Fed had to cap the price of gold and stop the rise.”

It’s certainly one explanation as to why gold is down given eurozone, Japanese, American and now Chinese woes. But another is that speculators have been dumping gold ETFs and flooding into the U.S. dollar, U.S. equities and the US-dollar denominated bonds.

The Yankee dollar has become a safe haven again.