Gold slumped to its lowest level in 15 months on Monday, leaving investors split over the near-term outlook as it trades near key technical levels.
Better-than-expected U.S. jobs data on Friday boosted the dollar and dampened safe-haven demand for gold, pushing prices to $1,183.46 on Monday.
A break below key support $1,180 would spell further pain for gold, said Chris Weston, chief market strategist at IG. Gold fell to the $1,180 level twice last year, in the second and fourth quarter, but rebounded on both occasions.
"If we get break of $1,180, $1,100 is on the cards before year-end," Weston told CNBC. "There's a perfect storm for gold. Inflation expectations in the U.S., Europe and Japan—three of the biggest economies—have been falling. There's no reason to hedge yourself."
Gold has declined 9 percent over the past six months, failing to draw strong safe-haven bids from simmering geopolitical tensions in Eastern Europe and the Middle East that have traditionally seen investors flock to the precious metal.
Instead, the benign inflationary environment and rally in the U.S. dollar have dulled the appeal of the precious metal. A stronger dollar is negative for gold demand as it makes the metal more expensive for holders of other currencies.