LONDON (Reuters) - Gold prices surrendered gains on Tuesday in line with stock markets and the euro as investors awaited a statement from Federal Reserve chairman Ben Bernanke, which will be closely watched for hints of any further economic stimulus measures. Assets seen as higher risk, such as equities and commodities, rose in earlier trade after expectations grew that Bernanke would hint in testimony before Congress at 1400 GMT at another round of quantitative easing, but have since retreated. Further monetary easing would be supportive for gold, weighing on the dollar and maintaining pressure on long-term interest rates, which keeps the opportunity cost of holding bullion low. If QE is not mentioned, gold could quickly correct. Spot gold was down 0.2 percent at $1,586.86 an ounce at 1320 GMT, well off an earlier high of $1,599 an ounce, while U.S. gold futures for August delivery were down $5.00 an ounce at $1,586.60. "In the morning it looked like gold might go higher today because of expectations that Bernanke would give at least some hint of QE3," Commerzbank analyst Daniel Briesemann said, noting that gold had since slipped more than $10 an ounce. "There is probably more pressure to the downside than risk to the upside at the moment, more so if Bernanke disappoints later," he said. Gold has traded within a $150 range for the last three months, largely tracking the euro/dollar exchange rate, a key price driver, as it awaits clearer direction on U.S. policy. The dollar recouped early losses against the euro on Tuesday afternoon and European stocks eased back from highs. Most investors were earlier positioning for more QE, but analysts saw a risk the dollar may bounce or stocks could drop if Bernanke stopped short of signaling more easing. "As it sees the U.S. data continue to deteriorate, the market is starting to anticipate some kind of action, or at least rhetoric, from the Fed to support growth," Deutsche Bank analyst Daniel Brebner said. "Will Bernanke come out dovish as usual? I think so. Will he explicitly discuss his options? I'm not convinced he will. So I'm not sure he's going to give the market what it wants." INDIAN DEMAND WEAK Physical demand in India remained lackluster, with gains in the rupee versus the dollar, which make gold cheaper for local buyers, failing to stimulate much fresh buying. India's festival season, during which weddings will also take place, will start in August and continue until November. India is historically the world's biggest bullion consumer, though China, where recent buying has also been soft, has emerged as a challenger for that title. "Physical markets are... uninspiring, with volumes in China and India remaining at subdued levels," UBS said in a note. "Shanghai Gold Exchange gold volumes in the last five days have been just under 5,700 kg, which is 30 percent below the 12-month rolling average." The world's largest gold-backed ETF, New York's SPDR Gold Trust, said its holdings fell another 3.6 tonnes on Monday, meanwhile, bringing total outflows since the start of the month to 13.4 tonnes. In the same period of the previous month, they rose just over 7 tonnes. Among other precious metals, silver was down 0.2 percent at $27.24 an ounce. The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, held near its 2012 highs at 58 as silver underperformed. Spot platinum was up 0.2 percent at $1,415.25 an ounce, while spot palladium was up 1.3 percent at $580.57 an ounce. Data from auto industry group ACEA showed European car sales for June declined to the slowest pace in eight months. Platinum group metals, which are chiefly used in catalytic converters, are heavily exposed to the car industry. "While southern European countries in particular recorded a sharp drop in sales, the German and British car markets showed themselves to be relatively robust," Commerzbank said in a note. "If car sales were to pick up again, this should have a positive impact on platinum and palladium, which are used to manufacture autocatalysts," it said. "Because diesel engines are more widespread in the EU, platinum would be likely to profit in particular." (Reporting by Jan Harvey; editing by Anthony Barker and Keiron Henderson)

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