Goldman Sachs predicts a "significant decline" in gold in 2014, following losses of around 26 percent in the previous metal so far this year.

Bullion is set to fall at least 15 percent next year, the bank said in a report of the top 10 market themes for 2014 this week, which warned of the growing downside risk for commodities.

The decline would bring gold down to $1,057 an ounce – prices not seen since early 2010.

Gold suffered a sharp fall this week as better-than-expected U.S. economic data raised the possibility that the Federal Reserve may start scaling back its $85-billion-per-month bond-buying program earlier than anticipated.

(Read more: Gold set for biggest weekly loss in 2 months)

According to some market watchers, gold has yet to fully adjust to the reality of tapering, and is vulnerable to further weakness when the central bank finally begins to wind down its monetary stimulus – a major pillar of support that has driven gold to record high near $1,920 in September 2011.