Gold languished at a six-month low on Friday and was on the edge of tipping over to a 3-1/2 year trough after the Federal Reserve's move to curb its bond-buying stimulus prompted a huge sell-off.
This week's loss puts the metal firmly on track to post its biggest annual loss in 32 years.
Spot gold fell to a fresh 6-month low of $1,185.10 an ounce earlier on Friday, before clawing back some ground to $1,196.06 by 0343 GMT due to bargain-hunting.
Analysts and traders say charts and sentiment remain bearish, with gold at risk of falling further.
"Asian trading volumes are really thin so I don't expect much movement (immediately). But through the day I think we could take out the year-lows," a Hong Kong-based precious metals trader said late in the morning.
"Sentiment took a real beating yesterday. Many people were surprised with the delayed reaction to the taper news. I wouldn't be surprised if we end the year below $1,200."
On Wednesday, the day of the Fed announcement of a $10 billion cut in its monthly bond purchases, gold fell 1 percent. But the selling picked up on Thursday, with the metal losing 2 percent, close to the 2013 low of $1,180.71 in late June - which is also the lowest since 2010.
Gold has lost about 3 percent for the week, and 29 percent for the year.
The Fed's $85 billion in monthly bond purchases, along with other monetary stimulus measures, had fuelled a big run-up in gold prices in the last few years, with the metal hitting an all-time high of $1,920.30 in 2011.
However, with an improving economy and stubborn low-inflation in the United States, gold's appeal has dropped off.
"Gold dropped through multiple key technical levels yesterday and shows little tendency to rebound," Phillip Futures analysts wrote in a note. "We expect prices to consolidate briefly but remain pressured to make new lows below $1,180.71."
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 3.90 tonnes to 808.72 tonnes on Thursday, the lowest in nearly five years.
Outflows from the top eight gold ETFs have totalled about 720 tonnes as investors channel more money to equities.
Physical demand failed to pick up in a big way despite the drop in prices, another sign that consumers expect more price falls.