PRECIOUS-Gold ticks up as bonds rout pauses

* US Vice President Vance says lots of progress made in US-Iran talks

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

* Traders see 40% chance of US rate hike in December (Recasts for Europe mid-session trade)

By Noel John

May 20 (Reuters) - Spot gold prices ticked up on Wednesday as U.S. Treasury yields slipped with hopes of a potential resolution to the U.S.-Iran conflict easing some inflation concerns.

Spot gold gained 0.3% to $4,494.50 per ounce, as of 1116 GMT, after falling to its lowest level since March 30 earlier in the session.

U.S. gold futures for June delivery trimmed earlier losses and were 0.3% lower at $4,497.40.

"Any positive progress in U.S.-Iran talks that lead to a potential re-opening of the Strait of Hormuz may boost gold prices as the dollar weakens and inflation fears cool," Lukman Otunuga, senior research analyst at FXTM, said.

"However, if talks remain in limbo or tensions escalate further, gold may weaken as inflation fears intensify along with rate hike bets despite the risk-off mood."

U.S. President Donald Trump said the war with Iran would be over "very quickly", while Vice President JD Vance talked up progress in talks with Tehran about an agreement to end hostilities.

Brent crude was down around 3% while WTI lost 6% on the news, but both held above the $100 a barrel mark.

The dollar held near a six-week high, making greenback-priced bullion more expensive for other currency-holders.

Benchmark 10-year U.S. Treasury yields eased but hovered around a more-than-one-year high, as higher energy prices fuelled inflation worries and boosted bets for higher U.S. interest rates.

Higher Treasury yields raise the opportunity cost of holding non-yielding assets, including gold.

The Federal Reserve will avoid cutting rates this year, according to most economists polled by Reuters who largely pushed long-held calls for reductions into 2027 on hopes the current inflation flare-up is temporary.

Markets are increasingly pricing in possibilities of the Fed tightening monetary policy this year, with a 40% chance of a rate hike expected in December, according to CME Group's FedWatch tool.

Investors now await the minutes from the Fed's April policy meeting, due later in the day.

"Longer-term support (for gold) from geopolitical uncertainty, fiscal debt concerns and central bank reserve diversification remains intact," ANZ said in a note.

Spot silver rose 2.6% to $75.73 per ounce, platinum gained 0.9% to $1,938.90, and palladium was up 1.3% to $1,371.10. (Reporting by Noel John in Bengaluru, additional reporting by Ishaan Arora; Editing by Vijay Kishore and Emelia Sithole-Matarise)