SPDR Gold Trust, the world's largest exchange-traded gold fund, posted its second-biggest percentage drop in holdings this year on Tuesday, and is set to suffer more outflows if a slide in prices of the metal is sustained.

Holdings in SPDR are closely watched and are key to gold prices as the fund holds about $40 billion worth of the metal at current prices.

Spot gold fell 3.6 percent to a near three-year low of $1,230.29 an ounce on Wednesday, as upbeat U.S. economic data supported the Federal Reserve's strategy of scaling back its stimulus.

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Gold, typically seen as a hedge against inflation, has benefitted significantly from cheap central bank money courtesy of the Fed's quantitative easing, or QE, policy over the years.

Holdings in SPDR fell 16.23 tonnes, 1.65 percent, to 969.50 tonnes on Tuesday from the day before, to their lowest since February 2009.

The fall is the biggest this year since a 2.3 percent drop seen in mid-April, when spot gold prices fell the most in 30 years.

Gold prices have been in a fresh slump since the beginning of last week, losing 11.5 percent, as Fed Chairman Ben Bernanke said the U.S. central bank would likely begin to slow the pace of its $85 billion monthly bond purchases later this year.

"The outflows are very much driven by the positive stream of economic data and Bernanke clearly outlining the fact that if the economy continued to recover, QE is going to end," said Mark Keenan, commodity strategist at Societe Generale in Singapore.

'CASH NEGATIVE POSITIONS'

Gold fell below the key $1,300 mark last Thursday, fueling an acceleration in ETF outflows.

"With prices falling below $1,300 per ounce, this opens up a new bracket of potentially cash negative positions, given the positive number of shares accumulated between $1,200 and $1,300," Barclays Capital analysts wrote in a note.

About 288 tonnes of gold were accumulated across all physically-backed gold ETFs within that price range, the analysts said.

SPDR Gold, in which billionaire hedge fund manager John Paulson is the biggest shareholder, has seen about 380 tonnes of outflows this year, valued at over $16 billion at the current spot price.

The outflows are the biggest since the fund began operations in 2004. Bullion, down more than 26 percent for the year, is headed for its worst annual performance since 1981.

"ETFs have a huge impact on sentiment in the gold market," said Keenan. "They have a disproportionate effect because of their visibility."

Keenan expects about 800 tonnes of outflows across all gold ETFs this year.

Several brokerages cut their estimates on gold prices earlier this week citing the Fed's plan to wind down bond purchases.

Gold's plunge is drawing a muted response from Asian consumers and not a repeat of the buying frenzy seen in April as India's curbs on trade of the precious metal and renewed concerns about China's growth dent demand.

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