Year-to-date gold prices dropped into the red this week as fears of the eurozone falling apart gripped investors and led them to turn their backs on gold as a safe havenpartly because they were bidding up the dollar.

The SPDR Gold Shares (GLD - News), the $63.87 billion physical bullion ETF, was trading at $149.86 a share, 1.5 percent lower than at the end of last year, according to data on Google Finance.

Spot gold prices were at $1,543.50 a troy ounce Wednesday morning, their lowest since late December. The slide, around 7 percent in the past month, comes even as legendary hedge fund manager George Soros said in a regulatory filing yesterday that he tripled his GLD holdings in the first quarter, Bloomberg News said.

Gold is behaving very differently than it did last summer around the time of S'Ps downgrade of U.S. debt. Gold rose at the time to a record of around $1,900 an ounce, before the price began to crater due largely to redemptions by banks and hedge funds seeking to cover positions as worries turned to the debt-laden eurozone.

The strengthening of the dollar is a big reason gold prices are sliding, though ETF holdings are relatively stable, meaning much of the price action is being driven by the gold futures market. Gold is priced in U.S. dollars.

If the price of gold is unchanged, but the dollar appreciates, gold will then likely trade lower, said Timothy Harvey, a senior vice president at ETF Securities, an ETF firm that specializes in precious metals.

Harvey said about 400,000 ounces has been redeemed globally in the past week and that this amount represents less than half a percent of the gold held in ETF structures globally, hardly enough to affect prices significantly.

Sell-off Could Turn Sharper

If Greece does get kicked out of the eurozonea possibility some observers have dubbed a Grexitand the contagion spreads to Spain or Italy, gold could fall even further.

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Gold Heads Into The Red In 2012