* Spot gold still targets Oct. 7 low of $1,241.20 -technicals
* Minutes of FOMC's Sept meeting due at 1800 GMT
* Platinum, palladium touch multi-month lows (Adds comment, updates prices)
By Swati Verma
BENGALURU, Oct 12 (Reuters) - Gold edged higher on Wednesday as the U.S. dollar retreated, with markets waiting for minutes from the September Federal Reserve policy meeting for more clues on any interest rate hikes this year.
Spot gold XAU= was up 0.3 percent at $1,255.92 an ounce by 0715 GMT, after falling half-a-percent in the prior session.
U.S. gold futures GCcv1 gained 0.1 percent to $1,257.4 an ounce.
Minutes of the Federal Reserve Open Market Committee's (FOMC) September meeting are scheduled to be released at 1800 GMT on Wednesday.
"If the minutes provide more data that the voter members in the FOMC are showing greater divergence in opinions, (then)combined with the recent release of U.S. economic data ... the probability of Fed hiking the interest rates in December is possibly going to increase," said NAB analyst Vyanne Lai.
The upside risks to gold prices associated with Republican candidate Donald Trump's presidency after the first two debates have also receded, said Lai, adding that the seasonally strong physical demand period in October would however provide some support to gold prices. overall trend into December would be a downward one."
Traders have priced in a 70-percent chance that the Fed will raise rates at its Dec. 13-14 meeting.
The metal is highly-sensitive to U.S. interest rates, increases in which lift the opportunity cost of holding non-yielding gold while boosting the dollar, in which it is priced.
The dollar index .DXY , which measures the greenback against a basket of six major currencies, was down 0.1 percent at 97.589. The index surged to a seven-month high on Tuesday. USD/
"Investors will continue to eye developments for a potential December FOMC rate hike as well as the race to the U.S. presidency as key market movers in the near term," Alex Thorndike, senior precious metals dealer at MKS PAMP Group, said in a note.
Spot gold still targets its Oct. 7 low of $1,241.20 per ounce, as its bounce from this level has completed, according to Reuters technical analyst Wang Tao. spectre of falling U.S. equity markets should theoretically be supportive for gold," INTL FCStone analyst Edward Meir said in a note.
Asian shares hit three-week lows on Wednesday after a dour start to Wall Street's earnings season knocked U.S. stocks. MKTS/GLOB
Among other precious metals, platinum XPT= was up 0.3 percent at $947.60 an ounce, having touched an over-six-month low of $939.60 an ounce.
Palladium XPD= gained 0.2 percent to $647.80 an ounce, after touching a low of $643.72 - its weakest since July 19.
Silver XAG= climbed 0.7 percent to $17.56 an ounce, having declined 1 percent in the previous session.