Gold's traditional appeal as a safe-haven asset did little to lure investors back to the precious metal when turmoil rocked global equity markets last month.
The spot price stood at US$1,125.15 an ounce on Friday. It has changed little in the past 10 days, although it is up slightly from the US$1,080.25 seen in July - its lowest level in more than five years.
Prices are down more than 6 per cent so far this year, and well below the historical peak of US$1,777.88 recorded in September 2012.
Analysts told The Sunday Times that gold did not rally during the recent stock market meltdown because investors had not spotted warning signs that the world is headed for a global recession.
"The United States and Europe growth continue to expand in line with expectations," noted Mr Wayne Gordon, a commodities strategist with the chief investment office at UBS Wealth Management.
"Also, a hard landing in China is not the base-case scenario," he said, referring to slowing growth in the world's second-largest economy.
He noted a marked drop in global demand for gold as well. World Gold Council data shows that demand for gold in the second quarter fell 12 per cent to a six-year low, led mostly by India and China.
ABN-Amro analyst Georgette Boele said in a report last week that gold's status as a safe haven had been significantly lowered for some years.
"The market has changed dramatically, with the arrival of gold products that opened the market to a wider public," she said.
Such products include gold exchange-traded funds (ETFs), which are easy to liquidate.
"(This means that) gold can be bought not only as protection against uncertain times but also for speculation purposes," said Ms Boele, adding that this trend goes completely against the asset's traditional safe-haven character.
She expects gold prices to fall to US$1,000 an ounce by December and even lower to US$800 by the end of next year, in line with the rising US dollar.
Mr Gordon is similarly bearish about gold, setting a target price of US$1,050 an ounce over the next three months.
He said investors would continue to keep their eyes peeled for clues to an impending interest rate hike by the Federal Reserve.
"Overall, we advise investors to remain cautious ahead of any Fed action," he said, noting that the recent market turmoil is unlikely to materially affect the Fed's judgment about the US economy or the likelihood of a stronger greenback over the coming year.
However, historically, the rate hike cycle "has not been completely detrimental to gold", he said.
"In fact, a gentle rate hike cycle could again leave real interest rates negative or at zero in the US next year," he said.
"Such an environment would be more supportive of gold... although it is too early to take exposure yet, in our opinion."
Phillip Futures analyst Howie Lee expects prices to head further south, especially once a series of expected rate hikes from the US kicks in.
However, gold's appeal as a safe-haven asset would not be "easily broken", he said.
"It still is one of the best anti-crisis hedges for an investor," he said. "This property of gold might not be shining very strongly because of the low-inflation and loose monetary environment that we are in, but markets move in cycles.
"There is still perceived intrinsic value in gold, which can be bought in manageable amounts in a highly liquid market."
Allocated Bullion Solutions chief executive Seamus Donoghue noted that demand from China, while "quite subdued" so far this year, is starting to recover.
"The yuan's recent devaluation is likely to be a strong catalyst for renewed Chinese demand," he said.
"Chinese investors have seen a loss of confidence in both equities and real estate and, now, the value of their currency as well - this should drive a return to gold as a traditional safe-haven asset."
He believes demand from China as well as India, which is likely to come in as the largest gold importer this year, should stabilise gold prices in dollar terms.