Gold suffered its biggest single-day drop since December 2013 on Friday, after robust U.S. jobs data fanned expectations that the Federal Reserve will soon raise rates, and analysts warn that further declines are likely.
"Gold has fallen from grace and its ascent to $1,306 in January now looks to be a false dawn and a distant memory," Howie Lee, investment analyst at Philip Futures wrote in a note on Monday.
"It is now in negative year-to-date territory and the downtrend looks unlikely to stop here. With the Fed moving closer to a rate hike after last Friday's labor report, no amount of buying-on-dips will likely be sufficient to rescue gold from its slide south," Lee said, adding that his 2015 target of $1,100 is now firmly in sight.
The precious metal tumbled almost 3 percent to $1,164 on Friday – wiping out its gains for the year. It recovered a touch on Monday but languished near three-month lows.
Catching a falling knife
With a stronger U.S. dollar and little sign of inflationary pressure on the horizon, Ric Spooner, chief market analyst at CMC Markets, says it's the "worst case of all worlds for gold."