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Should you write off gold this year?

Good news for the U.S. economy, in the form of a solid jobs report, decked gold on Friday, leading some analysts to write the yellow metal off for the year.

"It's the nail in the coffin for gold," said Howie Lee, an investment analyst at Phillip Futures, noting it fell despite increasing tensions over Greece. "It's increasingly likely [the Federal Reserve] will hike in June. Prospects of higher interest rates have proved to be a catalyst for gold's downfall."

Read MoreHedge funds snap up gold, but where's it heading?

On Friday, gold for April delivery fell as much as 3.6 percent in intraday from Thursday's high, touching a low of $1,228.20 an ounce. In early Asian trade Monday, it recovered somewhat, trading around $1,237.10 an ounce

The drop followed data showing U.S. non-farm payrolls rose by 257,000 jobs in January, beating expectations for around 234,000 and totting up to more than a million jobs over the past three months. That boosts the chances the Fed will raise rates sometime this year, and higher yields make gold's potential returns look less attractive.

"In the short term, we should see gold prices fall further," Lee said, noting even the seasonal Lunar New Year rally should have already run its course. While gold may occasionally rally, absent any major geopolitical tensions, he expects a downtrend into the year-end.

Better alternatives

Lee isn't alone in expecting gold will struggle.

"People are just looking for a return on their capital. Obviously, you can't get that from gold. It's just a store of value," Chris Weston, chief market strategist at IG, said. "Potential valuations in the bond market are at better levels."

The benchmark 10-year U.S. Treasury yield rose to 1.94 percent on Friday from 1.81 percent prior to the jobs data. In Asian trade Monday, the yield was trading around 1.92 percent.

Weston also expects news on the U.S. economy will be the driving force for gold ahead, but he's checking the charts, saying the latest drop could mark a trend change. If the yellow metal trades below $1,217 an ounce, Weston will turn more bearish.

Still alluring?

To be sure, not everyone expects a Fed rate hike would tarnish gold's outlook.

Read MoreIs this the start of a gold bull market?

"Whatever theory might say, swings in the U.S. interest rate cycle rarely have much impact on the price of gold in practice," said Julian Jessop, head of commodities research at Capital Economics, in a note Friday. He noted that gold prices barely moved in the early 2000s when rates were cut and rallied during the mid-2000s' tightening.

"If Fed tightening is only gradual and interest rates remain low, there would be plenty of scope for other factors to re-emerge as the key drivers of the gold price," he said, citing the prospects for further monetary easing in Europe and Japan and the potential for higher gold demand in emerging markets such as China and India.

Jessop is sticking with a year-end gold forecast of $1,400 an ounce.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1