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These two things will drive gold: Pro

Where's the bottom for gold?

With December gold options expiring Monday, the market will likely remain in check. But it is still important to watch the U.S. dollar for cues.

December gold futures traded to a low of $1,225.70 in the Sunday overnight session, the metal's lowest level since July 8. Already in a bear market, gold is being led lower by a stronger dollar and by a decrease in global risk premium due to a deal the Iran nuclear deal.

(Read more: Bargain hunters get ready to buy gold)

The expiration of the December contract is traditionally the biggest of the year. After a quiet day on Friday in which gold remained in a $10 range below resistance at $1,251 and above $1,240, the stronger dollar sparked selling ahead of expiration.

With expiration on Monday, we would not be surprised to see the market stay in check after its early move lower around midnight.

Resistance will now come in against previous lows at $1,235 to $1,236.50; a close below here will help the market maintain the negative momentum. On the downside, support comes in at $1,220, but the next major downside target is $1,209.40.

(Read more: Where are Treasurys going? Just watch gold)

If the Dollar Index can chew through resistance at 81, then look for gold to suffer under further downside pressure.

By Rich Ilczyszyn, special to CNBC.com. Ilczyszyn is founder and CEO of iiTrader. Follow him on Twitter @iiTrader.

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