Gold fell 2.6 percent on Monday after matching 28-year highs as worries about the U.S. economy and the U.S dollar rebounded.

The dollar gained as much as 1.2 percent, partly as investors sought safety in U.S. Treasuries after losses in European and Asian stock markets. Investors also pressured gold as they sought profits from the metal's rally.

Gold futures for December delivery dropped $8.40, or 1.1 percent, to $760 an ounce on the Comex division of the New York Mercantile Exchange. The percentage decline was the biggest since Oct. 8 according to Bloomberg Data.

But gold was likely to rebound after consolidating its position and was seen hitting $800 an ounce by the end of the year, underpinned by a likely weakness in the dollar, tensions in the Middle East and strong oil prices.

Having hit record lows against the euro and a basket of major currencies earlier on Monday, the dollar bounced back with investors betting the dollar's decline in the short term may have been too far, too fast.

A firmer dollar makes gold costlier for other currency holders and often lowers bullion demand.