Gold could fall below $1,500 an ounce in the near term, as bullion has underperformed other assets and appears to have lost its safe-haven appeal, CitiFX said.

The technical research arm of Citigroup said on Tuesday, however, it still expects the precious metal to rise above $2,000 an ounce after a correction, and it will eventually trade as high as $3,400 an ounce.

Gold has gone from being a protection against 'risk off' to a 'risk-off trade' in itself...We still believe that this market nervousness has further to run in the coming weeks or months, CitiFX strategists said in a note.

CitiFX said that there is a high probability that gold will at least retest the area down around $1,535-$1,485, and possibly lower still.We would not be a buyer of gold for the foreseeable future, it said.

In recent weeks, gold has underperformed major currencies, fixed-income products, crude oil, and has outperformed equities by not as much as other asset classes, CitiFX said. When a hedge to risk starts losing money in an anti-risk environment but rallies in a pro-risk environment, something is wrong, it said.

Gold -- traditionally a safe haven in times of economic uncertainty -- slumped 1 percent in the last two sessions, moving in lock-step with riskier assets such as equities, which ended sharply lower on Monday.

On Tuesday bullion ended down 0.5 percent at around $1,660 an ounce, after partially recouping deeper losses despite a late-day U.S. equity market rally.