Investors are reducing gold holdings for a third month, the longest stretch since 2004, and favoring the dollar as a haven from Europe’s debt crisis.

Bullion erased its gains for 2012 this week as the dollar rose against a basket of currencies for a record 12 straight days. Gold held in exchange-traded products fell 30.8 metric tons since reaching a record 2,410.2 tons on March 13.

Royal Bank of Scotland Plc, ABN Amro Bank NV and Barclays Plc cut their forecasts in May, though Goldman expects prices to rise 25 percent to $1,940 an ounce in 12 months.

The ECB will be forced to pump more money into the euro region in response to the debt crisis, reviving the appeal of gold.

Record-low interest rates from the U.S. to Europe may prop up demand for gold, which generally earns investors returns only through price gains. The Fed has pledged to keep rates at “exceptionally low levels” at least through late 2014. Central banks are buying bullion at the fastest pace in five decades, adding 439.7 tons in 2011. They may purchase a similar amount this year, the London-based World Gold Council estimates.

Usually, gold could be viewed as a safe haven or a contra play to the dollar. It’s really doing neither right now. It’s highly possible that we’ll see gold and commodities in general continue to drift down until the Fed steps in with some sort of quantitative easing package.