* Silver down more than 4 percent after four-day rally
* Gold briefly rallied after Fed's meeting minutes (Rewrites throughout, updates prices; adds comment, second byline, NEW YORK to dateline)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Oct 8 (Reuters) - Gold turned lower on Thursday in a dramatic turnaround after Federal Reserve meeting minutes showed policymakers at the U.S. central bank were unsettled by signs of a global economic slowdown but that their outlook was not "materially altered".
Spot gold XAU= eased 0.4 percent to $1,139.86 an ounce at 3:16 p.m. EDT (1916 GMT), having rallied 0.5 percent to $1,151.20 after the September minutes were released.
The Fed thought the economy was close to warranting an interest rate hike in September but policymakers decided it was prudent to wait for evidence a global economic slowdown was not knocking America off course, minutes from the Sept. 16-17 meeting showed. urn:newsml:reuters.com:*:nW1N11S023
"Gold's initial rally above $1,150 and subsequent modest sell-off reflects a deep ambivalence in the market regarding the possibility of the December Fed rate hike," said Tai Wong, director of base and precious metals trading for BMO Capital Markets
"At first, gold reacted positively to the September Fed minutes which indicated that the FOMC would look for 'further improvement' in the labor market, confirming that the outlook had not 'deteriorated significantly' before raising rates."
A delayed rate rise could support gold in the near term.
U.S. gold futures for December delivery GCZ5 settled before the minutes were released, down 0.4 percent at $1,144.30 an ounce.
"Our call remains for a December hike, although clearly the U.S. data has deteriorated since this meeting and so the risks are that some of those members previously in favor of a hike this year shift towards a later date for lift-off," said Andrew Grantham, senior economist, director, for CIBC Economics, in a note.
The Fed opted not to hike rates in September in the wake of cooling global growth and fears of a deepening slowdown in China.
World stock indexes edged higher after the release of minutes while the U.S. dollar .DXY extended declines and 10-year U.S. Treasury yields rose. MKTS/GLOB
Gold was already trading lower as China returned to the market after an Oct. 1-7 holiday, when prices had gained $30 an ounce.
Silver XAG= fell as much as 4.4 percent at $15.36 an ounce, after a four-day rally.
Elsewhere, SPDR Gold Trust, the top gold-backed exchange-traded fund, said its holdings fell 0.26 percent to 687.20 tonnes on Wednesday.
Platinum XPT= was up 0.5 percent at $945.245 an ounce and palladium XPD= fell 0.1 percent to $696.50 an ounce.