PRECIOUS-Gold heads for third weekly loss on firm dollar, hawkish Fed signals

(Updates prices, adds details as of 0338 GMT)

* Dollar hits one-year high on Fed hike bets

* Traders see 87% chance of U.S. rate hike in December

* All precious metals set for weekly decline

* Goldman Sachs lowers December gold price target to $4,900/oz

By Noel John

June 19 (Reuters) - Gold prices were on track for a third consecutive weekly decline, falling more than 1% on Friday, as a stronger dollar and hawkish signals from the U.S. Federal Reserve weighed on the metal.

Spot gold was down 1.1% at $4,163.93 per ounce, as of 0338 GMT. The contract was down 1.3% so far this week.

U.S. gold futures for August delivery fell 1.5% to $4,181.20.

Markets in mainland China and Hong Kong were closed for the Dragon Boat Festival holiday, thinning market activity.

The dollar rose to a one-year high, making greenback-priced bullion more expensive for other currency holders.

"Gold's rally on the back of the U.S.-Iran peace deal proved short-lived. The resurgent dollar, powered by the Fed's newly hawkish tone under Kevin Warsh, has stolen the spotlight," said Tim Waterer, chief market analyst at KCM Trade.

"The new chairman's firm stance has effectively neutralised the geopolitical tailwind, reminding everyone that monetary policy still calls the shots." Nine of the U.S. central bank's 19 policymakers believe they will need to raise the policy rate this year. That would be in line with several global central banks either raising borrowing costs or signalling moves to tame inflationary pressures stemming from the Iran war.

Traders see an 87% chance of a U.S. rate hike in December, from 61% before the Fed decision, according to the CME FedWatch Tool.

Gold tends to lose appeal when rates are high, as it does not yield interest. Goldman Sachs cut its gold price outlook to $4,900 per ounce by December from its earlier forecast of $5,400, with the bank not expecting a Fed rate cut this year. On the geopolitical front, U.S. Vice President JD Vance pulled out of a planned trip to meet Iranian negotiators in Switzerland to begin complex talks on implementing a 14-point agreement struck between Tehran and Washington to end their war.

Spot silver fell 2.2% to $64.36 per ounce, platinum lost 1.9% to $1,663.03, and palladium was down 1.6% at $1,258.04. The metals were on track to log a weekly loss. (Reporting by Noel John in Bengaluru; Editing by Sherry Jacob-Phillips and Harikrishnan Nair)