LONDON (Reuters) - Gold prices recovered earlier losses on Tuesday after a Federal Reserve official said the bank is "running flat out" in its efforts to boost the economy after last week's announcement of a third round of quantitative easing measures.

Caution over how far the policy would prove effective and losses on the broader markets, kept a lid on gains, however. Top Fed policymakers disagree sharply over whether a third round of QE would work.

Chicago Fed President Charles Evans said the Fed's announcement last week that it would buy $40 billion worth of mortgage-backed securities each month for as long as it takes for the job market to improve will provide "important added stimulus" to jobs and shore up the economy.

But Dallas Fed President Richard Fisher, a forceful opponent of further easing, said he would have dissented last week if he had a vote on the policy-setting panel this year.

Spot gold was up 0.2 percent at $1,763.80 an ounce at 9:18 a.m. EDT (1318 GMT), having earlier dipped as low as $1,752.34 an ounce, while U.S. gold futures for December delivery were down $4.40 an ounce at $1,766.20, also well off lows.

Prices were knocked lower on Monday by a drop in crude oil, which remains under pressure.

"Judging by the broader commodity market, the QE3 euphoria is over for now," Andrey Kryuchenkov, an analyst at VTB Capital, said. "Yet bullion is still bullish in the long run, given debasing of major fiat currencies, liquidity boosts, etc. Inflation concerns will resurface."

The Fed decision, which may benefit gold by maintaining pressure on long-term interest rates, boosting liquidity and fanning inflation fears, sent spot prices to a peak of $1,777.51 an ounce last week.

They have since consolidated along with the broader financial markets, but in the longer term the news has raised the floor for gold prices, analysts said.

"The policy says that, even if we reach economic sustainability, central banks will keep interest rates low and monetary policy loose," LGT Capital Management analyst Bayram Dincer said.

"The forward-looking guidance of central banks is very favourable for real assets, because in that kind of scenario you have inflation-hedge and diversification benefits provided mainly by gold."

Caution reflected in ongoing weakness in other assets tempered gold's rise. European shares remained under pressure as investors cashed in gains from 14-month highs. .EU

The euro also stayed lower, succumbing to profit taking as investors turned their attention from central bank stimulus to slowing global growth and doubts about Spain's desire for an international aid package. <FRX/>

RESISTANCE SEEN AT 2012 HIGH

From a technical perspective, any fresh rise in gold prices is expected to run into resistance at this year's high of $1,790 an ounce, hit in late February, according to analysts who study past price moves for clues on the next direction of trade.

"We are happy to stay bullish gold," Barclays Capital said in a note. "Our upside targets are at $1,791 and then $1,803. We also expect silver to extend gains toward our initial target near $35."

Silver was down 0.5 percent at $34.37 an ounce, having tracked gold to a 6-1/2 month high at $34.92 last week.

Among platinum group metals, spot platinum was up 0.3 percent at $1,665.24 an ounce. The metal posted its biggest one-day drop since early April on Monday, down 2.3 percent.

Strikers at Lonmin's Marikana mine in South Africa have cut their basic wage demand to below 11,000 rand ($1,300) a month to try to end a six-week strike that halted platinum output at the world's third-largest producer, a negotiator said on Tuesday.

Violent unrest at the mine last month killed 45 people and stopped production, sparking a sharp rally in platinum prices.

"The psychology of the market seems to be shifting from concern that the strikes would spread and possibly shut down the bulk of South Africa's PGM production, to cautious optimism that the wave of industrial stoppages has crested and may be receding," HSBC said in a note.

"Since industrial demand is sluggish, a relaxation of supply concerns may take prices lower," it added. "The labor situation remains volatile, however, and renewed strife and fresh labor stoppages can occur at any time and drive prices higher. Based on this, we do not expect any further declines to be steep."

Spot palladium was up 0.8 percent at $678.97.

(Editing by Alison Birrane and David Cowell)

Source: http://ca.reuters.com/article/businessNews/idCABRE88G00B20120918?sp=true