* European stocks rebound after heavy sell-off
* Dollar index recovers after deepest drop since 2011
* Palladium down more than 7 pct to lowest since 2010
* GRAPHIC-2015 asset returns-http://link.reuters.com/dub25t (Updates throughout, changes dateline, pvs MANILA)
By Jan Harvey
LONDON, Aug 25 (Reuters) - Gold fell on Tuesday as global markets found some respite after the previous day's rout, with European stocks rising more than 3 percent and the dollar rebounding from a seven-month low versus the euro and the yen.
Autocatalyst metal palladium continued to slide, however, falling as much as 7 percent to its lowest in five years.
Spot gold XAU= was down 0.4 percent at $1,150.40 an ounce at 0954 GMT.
U.S. gold futures GCv1 for December delivery were down $3.70 an ounce at $1,149.90.
Gold had edged lower on Monday, with some traders citing liquidation to cover losses on other markets, but largely held its ground after a plunge in Chinese equities sent world stocks and commodity prices tumbling and knocked the dollar.
While Chinese stocks fell another 8 percent on Tuesday, markets elsewhere rebounded, with European shares climbing, oil prices recovering from 6-1/2 year lows, and the dollar rising 0.4 percent. That has put pressure on gold.
"If those trends continue, then certainly it will create some short-term pressure on gold prices as the initial fear in the marketplace that we saw yesterday dissipates," Standard Chartered (LONDON:STAN) analyst Nicholas Snowden said. "But it's still an extremely uncertain setting and in the short term gold will benefit from that."
Gold has rebounded sharply from the 5-1/2 year low it hit in July on the back of expectations that the Federal Reserve is on track to raise interest rates this year for the first time in nearly a decade, lifting the opportunity cost of holding gold while boosting the dollar.
While those expectations have receded after a dovish reading of the minutes of the Fed's last policy meeting and on fears of a broader global economic slowdown, they are keeping a lid on gold's gains.
"We're still in an environment where we know U.S. interest rates will go up," Snowden added. "For gold, that limits how much of a bid you will see, even with the sort of financial market turmoil that ensued yesterday."
Palladium XPD= fell to a low of $528.50 an ounce, its weakest since September 2010, and was later down 2.9 percent at $554.50.
"Platinum group metals have noticeably been lagging in recent weeks, failing to benefit more from gold's rebound," UBS said in a note.
Platinum XPT= was down 0.1 percent at $987 an ounce, while silver XAG= was up 0.1 percent at $14.79 an ounce.