* Fed minutes show split on U.S. inflation outlook
* Dollar pares gains after Fed minutes released
* N.Korean missile launch prompts short-lived rally
* Silver at 6-month lows, platinum at 8-week low
(Updates prices; adds comment, second byline, NEW YORK dateline) NEW YORK/LONDON, July 5 (Reuters) - Gold steadied on Wednesday, after Federal Reserve minutes showed a growing split among policymakers on the inflation outlook and the dollar pared gains, lifting the precious metal above an eight-week low reached earlier in the session. The minutes showed the central bank was split on how inflation might affect the future pace of interest rate increases. "We changed our call for the next Fed hike by moving it to December (from September) and the June Fed minutes seem to confirm that the September meeting will instead be used to announce the start of the run-off of the central bank's balance sheet," said Avery Shenfeld, chief economist for CIBC Capital Markets, in a note.
Spot gold was down 0.02 percent at $1,223.37 an ounce
lowest since May 10. A missile launch by North Korea prompted only a brief rally for gold, seen as a safe haven in times of uncertainty.
U.S. gold futures for August delivery settled at
$1,221.70, up 0.2 percent from Monday's settlement following a U.S. holiday on Tuesday.
The dollar index was little changed after rising 0.3
percent. A stronger greenback makes gold more expensive for holders of other currencies, and higher bond yields raise the opportunity cost of holding non-yielding bullion. "We've seen the dollar rebound from recent lows and treasury yields moving higher. That is a very powerful driver of the gold market," Julius Baer analyst Carsten Menke said. Though yields eased later on Wednesday, they have risen sharply in recent weeks as several central banks signaled that they would tighten monetary policy, while Fed officials appeared undeterred by weak economic data and low inflation. That has caused gold prices to tumble more than 3 percent from a high of $1,258.81 on June 23. Investors were also looking ahead to U.S. employment data on Friday that could influence the pace of rate rises.
In other precious metals, silver fell as low as
$15.84, the weakest since December.
Platinum dropped to a low of $896.25 per ounce, the
lowest since May 9. Strong technical support from Fibonacci retracement and previous lows was between $902.39 and $890.49, analysts at JPMorgan said in a note. "(This) could potentially provide a base for a broader recovery if not a new up-trend," they said.
Palladium was down 1.3 percent at $840.70 an ounce.
(Additional reporting by Nithin Prasad and Vijaykumar Vedala in Bengaluru. Editing by Jane Merriman and Elaine Hardcastle)