PRECIOUS-Gold falls as dollar holds firm on Fed rate-hike expectations

* Dollar holds near one-year high

* US PCE data due on Thursday

* Vance says US-Iran talks lay "good foundation" for final deal (Updates prices as of 0414 GMT)

By Pablo Sinha

June 23 (Reuters) - Gold prices fell more than 1% on Tuesday, pressured by a firmer U.S. dollar on expectations of a Federal Reserve interest rate hike this year, while investors assessed U.S.-Iran peace talks.

Spot gold was down 1.1% at $4,142.61 per ounce, as of 0414 GMT. U.S. gold futures for August delivery fell 1% to $4,160.20.

"Gold had received some relief from lower oil prices this week, but it is getting no such favours from the U.S. dollar, which continues to push higher on expectations of Fed rate hikes," said Tim Waterer, chief market analyst at KCM Trade.

The dollar held firm near the one-year high hit late last week, making gold less affordable for buyers holding other currencies.

The United States waived sanctions on Iran for 60 days from Monday after the first talks under a nascent peace deal, while officials reported a sustained lull in fighting in Lebanon under the agreement aimed at ending hostilities across the region.

U.S. Vice President JD Vance said talks with Iranian officials in Switzerland had laid a good foundation for a final peace deal, although Iran denied that it had begun discussions of its nuclear programme.

Chicago Fed President Austan Goolsbee said that with the labour market stable, he is focused on figuring out whether too-high inflation will stay that way or if it will recede as the effect of high tariffs fades and if the conflict in the Middle East gets resolved.

Traders now see an 88% chance of a rate hike in December, up from 61% before the Fed meeting last week, according to the CME FedWatch Tool.

Investors are looking out for U.S. Personal Consumption Expenditures data, the Fed's preferred inflation gauge, due later this week, for further monetary policy cues.

Spot silver fell 3.3% to $63.05 per ounce, platinum lost 1.9% to $1,646.30, and palladium was down 1.8% at $1,242.75. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)