The FE Alpha Manager held gold in his portfolios as recently as November 2012, but now thinks the price is under significant pressure.
"Recent months have seen developments undermining the case for holding gold – namely an improvement in investor confidence and anticipation that the pace of quantitative easing will diminish going forward," he explained.
"The perceived risk of eurozone chaos has been significantly reduced thanks to a credible commitment by the ECB to use all means necessary to avert a breakup of the currency union; furthermore, Federal Reserve and BoE officials indicate they are increasingly reluctant to pursue further QE and have initiated discussions on when to start phasing out the programme."
"In any case, inflation expectations remain contained, meaning that for the time being, the prospect of higher future inflation does not appear imminent."
"As a result, gold has lost much of its attraction as a hedge, especially considering its meteoric rise in recent years."
"Although the risks mentioned above have not been eliminated completely, the overall financial environment and gold’s significant past price appreciation did not justify maintaining the holding."
The gold price is down 2.28 per cent in the last six months, while the MSCI World index is up 17.24 per cent.
Performance of indices over 6months
Source: FE Analytics
At the time of writing, the price of gold is $1,575 – well off its record of over $1,900 in September 2011.
An inconclusive Italian election result and the start of a $1.2 trillion programme of spending cuts in the US were not enough to stop investors rotating out of gold and into more cyclical assets last week.
A stronger US dollar saw ETF investors continue to shun gold, with February 2013 recording the largest outflows since January 2011, according to ETF Securities.
Head of research at BullionVault, Adrian Ash, believes gold will remain on investors’ radars as long as real interest rates remain low – although he accepts the short-term outlook is relatively poor.
"With stock markets rising this year, it's natural for gold prices to struggle," said Ash.
"Lacking a clear focus for the financial crisis, gold investment has lost its urgency, short-term. Interest rates have also crept higher, albeit to zero after you account for inflation."
"This has weakened gold's appeal as an alternative to cash and bonds."
"However, a growing number of savers are losing patience with central-bank policy. The noises from Threadneedle Street about negative rates and fresh money-printing last week don't bode well for cash depositors."
"Sentiment outside the City and Wall Street remains positive towards bullion and it's hard to see that changing, with household deposit rates near zero and the debt crisis still so far from resolved."
For anyone who is still a fan of gold, an ETF such as ETFS Physical Gold or the Source Physical Gold ETF is probably the best way to get direct exposure.
For anyone who wants to take on a bit more risk, Smith & Williamson Global Gold & Resources and BlackRock Gold & General are options. The latter is included in the FE Select 100.