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Gold fell for a third day as a recovery in equities markets diminished the appeal of the metal as a haven and Goldman Sachs Group Inc. said the rally to a one-year high last week wasn’t justified.

Today, Gold price fell 1.14 percent to $1,195.04 an ounce

Gold stretched its losses into a third session and tumbled below $1,200 an ounce on Tuesday, as easing concerns over the global economy buoyed stocks and hurt safe-haven demand for the metal.

Bullion's three-day loss of more than 4 percent, its biggest such drop in seven months, takes the precious metal further away from a one-year high reached last week and threatens to undo a rally that has seen prices gain 13 percent so far this year.

Goldman Sachs's recommendation to short gold, prompted by the bank's belief that the recent fear-induced rally has been overdone, added to the bearish sentiment in the market.

Spot gold fell 1.5 percent to $1,191.40 an ounce by 0415 GMT, after earlier hitting a session low of $1,190.40. The metal slid 2.3 percent on Monday, its biggest slump since July.

“The rally in equity markets has halted the upward move in gold for now,” said Jordan Eliseo, chief economist at Australian Bullion Co. in Sydney. The promise of more easing from the ECB and other developed market central banks will be supportive of bullion, though rallies in risk assets and the dollar will continue to exert downward pressure, he said in an e-mail.

Gold prices recovered off lows, but stay below USD 1200 mark in Europe as the major European equity futures point to risk-on action after opening bell.

The immediate hurdle is seen at USD 1200, above which prices could test 1211.93 (23.6% of Dec low – Feb high). On the other hand, a break below 1190.60 (daily low) would open doors for a drop to 1180.12 (38.2% of Dec low – Feb high).

Reference: Bloomberg, Reuters, FXStreet