Matthew Smith had given Australia the interval lead but second-half goals from Patrick Bellenbaum and Christoph Bechmann put the Germans in control until, with two minutes remaining, the Australian captain, Mark Hager, equalised.
The world champions, Pakistan, had to settle for the bronze, beating the Netherlands 2-1 with goals from Alam Naveed and Mohammad Nadeem after Remco van Wijk had put the Dutch ahead in the second minute.
England twice came from behind against India, to draw with the eight- times Olympic champions only to lose the penalty shoot out 6-5 as the Indian reserve goalkeeper, Subbaiah Anjaparavanda, dived to tip Chris Mayer's stroke clear.
After their 1-1 draw with Australia on Saturday in their final pool game, England had gone into the game against India with confidence but had to concede an early goal as a casual pass from Kalbir Takher was punished by Dhanraj Pillay, who raced 40 yards to give Mukesh Kumar the opening goal.
Within three minutes England were on terms, Calum Giles scoring from England's first penalty corner. With England reduced to 10 men following the temporary suspension of Mayer, India regained the lead six minutes into the second half, Anil Aldrin striking home their first corner.
England bounced back again with 18-year-old Mark Pearn scoring his first international goal with a superb reverse stick shot after a quickly taken free hit from Takher. A few minutes later Pearn, with another reverse stick shot, nearly claimed victory but it was not to be and the game went into the penalty barrage.
ENGLAND: S Mason ( Reading); J Wyatt (Reading), J Halls (Old Loughtonians); G Fordham (Hounslow), Kalbir Takher ( Cannock), S Hazlitt (Hounslow, capt); C Mayer (Cannock), J Lee (Old Loughtonians), D Hall (Guildford ), N Thompson (Old Loughtonians), B Sharpe (Cannock). Substitutes used: C Giles (Havant), M Pearn (Reading).
India: E Aloysius; R Mishra, A Aldrin; Harpreet Singh, S Somesh, S Ahmed (capt); M Kumar, M Riaz, D Pillay, E Mascarenhas, G Ferreira. Substitutes used: K K Poonacha, Baljit Singh, H Quereshi.
Umpires: P Elders (Netherlands) and C Siebrecht (Germany).
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