Gold may extend November's 6 percent slide – the worst monthly loss since June – if Friday's U.S. jobs data beats forecasts, increasing the odds of that the Federal Reserve may exit its stimulus program sooner than anticipated, according to CNBC's survey of strategists, analysts and traders.
Economists expect the U.S. economy to have created 185,000 jobs in November, down from 204,000 jobs in October, according to a Reuters survey of economists. Barclays' economists are above consensus, forecasting payrolls gains of 200,000, helping push unemployment lower to a post-crisis low of 7.1 percent.
"If payrolls continue to track close to 200k per month, we feel that the December meeting could go down to the wire, suggesting that gold in particular could resume its downward trend," said Credit Suisse commodity strategists led by Ric Deverell said in a research report released on Dec. 2.
"We would expect a strong jobs number to spark the next leg down for gold, with a challenge of the year's low of $1,180 possible," they added.
(Read more: Gold suffers worst November since 1978)
CNBC's latest survey of market sentiment showed 73 percent of respondents (16 out of 22) expect prices to fall this week, 3 out of 22 say prices will trade around current levels while an additional 3 say prices will rise.
Even a solid payrolls number this week, however, may not necessarily mean the Fed will cut bond purchases at this month's meeting due to the risk of this year's acrimonious budget battles resurfacing in the first-quarter of 2014 when Washington faces looming debt ceiling deadlines.
"It's all about payrolls, which in my opinion will surprise to the upside, hence dollar positive, gold negative but it's unlikely that the Fed will taper this December - give them another month," said Sankalp Shangari of Shangari Ventures, a Singapore-based commodities trading, advisory and debt raising firm.
Evidence of sustained employment growth at a "reasonably high level" – one of the preconditions for the Fed to taper – may trigger more selling in the gold-backed exchange-traded funds (ETFs), leading to further price falls, said UBS commodity strategists Dominic Schnider and Giovanni Staunovo in comments emailed to CNBC.
"Gold is ready for the next leg lower," Schnider and Staunovo said. "Outflows from gold ETFs have moderately accelerated in recent days and should keep this pace."
'Relentless'
ETF liquidation has been major contributor to gold's more than 25 percent so far this year. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 5.7 tons to 843.21 tons last Wednesday to their lowest since early 2009. The fund has seen outflows of more than 450 tons this year as investors have rotated towards equities.
(Read more: Gold below $1,200 needed for 'new equilibrium')
The ETF exodus has been "relentless" as investor selling continues, said Mark Keenan, Cross Commodity Research Strategist at Societe Generale. The key risk, Keenan said, is the point at which these lower levels that the market is "cautiously eking out" start triggering producer hedging as miners seek to protect themselves against even further falls in the market by selling future production at fixed prices.
Strategists believe gold remains vulnerable to a drop below $1,200 in the near-term. "A test of $1,190 is looming," said Simon Grose-Hodge, Head of Investment Advisory, South Asia, LGT Bank.
Long-term gold bulls, however, say $1,200 will remain intact. "Gold could hold its July lows around $1,200, and if it does fall below that, I feel it will be short-lived," said Sean Hyman, Editor of Moneynews at Ultimate Wealth Report.
(Read more: Cramer: Golden opportunity in gold miner?)
Kirk Howell, portfolio manager at Allston Holdings added: "Gold couldn't stay over $1,255 last week and I would anticipate a retest of $1,225 soon in relatively range-bound trading."
—By CNBC's Sri Jegarajah. Follow him on Twitter @cnbcSri