Mr Soros is not alone in cutting his exposure to the yellow metal. Investors sold 2.5m ounces of gold through exchange traded funds in January and February as prices slid 8 per cent, and bankers say several hedge funds were also selling gold on the physical market.

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The fact that the Fed is set to turn off the liquidity pumps is seen as a negative signal for gold. First, it suggests increased confidence in the economic outlook - typically a bearish indicator for the yellow metal.

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Even the normally bullish World Gold Council, a mining industry-backed group, concedes that the end of QE2 poses a threat to gold. "If and when central banks stop QE and then start raising interest rates, that is obviously a challenging environment for all asset classes - including gold," says Marcus Grubb, managing director for investment.