PRECIOUS-Gold falls to 1-1/2-month low on higher US yields, firm dollar

* U.S. Vice President Vance says progress made in talks with Iran

* Benchmark 10-year Treasury yields near a more-than-one-year high

* Minutes from Fed's April policy meeting due at 1800 GMT

* U.S. Fed to avoid cutting rates this year - Reuters poll (Updates prices as of 0439 GMT)

By Pablo Sinha

May 20 (Reuters) - Gold prices slipped on Wednesday to their lowest point in 1-1/2 months, as high Treasury yields and a firm dollar outweighed optimism over a potential U.S.-Iran peace agreement.

Spot gold was down 0.4% at $4,464.64 per ounce, as of 0439 GMT, having touched its weakest level since March 30. U.S. gold futures for June delivery lost 1% to $4,466.40.

"Gold is running out of puff somewhat against this backdrop of rising yields, and a dollar which has a spring in its step courtesy of the hawkish shift in the rates outlook," said Tim Waterer, chief market analyst at KCM Trade.

The dollar hovered at a six-week high, making greenback-priced bullion more expensive for holders of other currencies.

Benchmark 10-year U.S. Treasury yields were steady at a more than one-year high, raising the opportunity cost of holding non-yielding gold.

U.S. signals on Iran remained mixed, with President Donald Trump warning Washington may still need to strike Tehran, while Vice President JD Vance said both sides were making progress and did not want a return to conflict.

Philadelphia Federal Reserve Bank President Anna Paulson said the current level of interest rates is appropriate for the moment, putting downward pressure on inflation at a time when price pressures remain elevated.

She, however, said it was "healthy" that investors had begun considering scenarios where rates might need to rise.

The U.S. Federal Reserve will avoid cutting rates this year, according to most economists polled by Reuters who largely pushed long-held calls for reductions into next year on hopes the current inflation flare-up is temporary.

Investors are waiting for minutes from the Fed's April policy meeting, due later in the day, to gauge the U.S. central bank's monetary policy outlook.

Spot silver fell 0.3% to $73.59 per ounce, platinum slid 0.3% to $1,917.18, while palladium rose 0.7% to $1,366.35.

(Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)