Gold futures fell by as much as $36 an ounce Friday, with strength in the U.S. dollar dulling demand for the precious metal as investors sold gold in a scramble for cash as U.S. stocks suffered steep declines.

The session’s action is “reflective of a ‘risk off’ day,” said Brien Lundin, editor of Gold Newsletter.

“Greece is back in the headlines, and the market is beginning to accept the inevitability of a default, which has prompted speculators to close positions and run for safety,” he said.

At last check, gold for December delivery was down $24.50, or 1.4%, to $1,790.30 an ounce on the Comex division of the New York Mercantile Exchange Monday, after tapping a fresh session low of $1,778.20.

Unfortunately, because “speculators had poured money back into gold recently, this safe haven had temporarily transformed into a speculative trade because of the hot money that had come into it,” said Lundin, in emailed comments. “That money’s coming out now.”

The decline in gold came as U.S. stocks dropped on fears that Greece is heading toward a default. The Dow Jones Industrial Average lost more than 200 points.

“Short term, liquidity and funding problems could well be forcing some players to sell gold or close positions, just as [what] happened when Lehman Brothers fell,” said Adrian Ash, head of research at BullionVault.com.

Growing concerns over the potential for a Greek default offered earlier support to gold. The December gold contract had climbed to as high as $1,832.90 an ounce.

The dollar and the Fed