PRECIOUS-Gold slips to two-week low as Fed rate-hike bets buoy dollar

* Traders bet on three rate hikes in 2026, per FedWatch

* U.S., Iran at odds over peace deal terms

* U.S. PCE date due on Thursday (Updates prices as of 0431 GMT)

By Pablo Sinha

June 24 (Reuters) - Gold extended losses on Wednesday, touching its lowest in almost two weeks as the dollar climbed due to rising bets on U.S. interest rate hikes, while investors assessed conflicting signals on the U.S.-Iran peace talks.

Spot gold fell 1.1% to $4,064.01 per ounce by 0431 GMT, having earlier hit its lowest since June 11. U.S. gold futures for August delivery declined 1.7% to $4,080.80.

U.S. President Donald Trump said on Tuesday that Iran had agreed to nuclear inspections into "infinity," while Tehran said it had made no such concession in negotiations, raising questions about the viability of their fragile peace deal.

The two sides also disagreed on the details of a provision that would allow Iran access to funds frozen in overseas accounts.

"What we're witnessing here is the evolution of the pressure that gold came under as a function of the war," said Ilya Spivak, head of global macro at Tastylive.

"The sort of inflation to higher rates dynamic has appeared in bonds falling, yields rising, the dollar rising, and gold falling."

Bullion has fallen about 23% since the onset of the U.S.-Israeli war on Iran in late February, as mounting inflationary pressure has given way to expectations of interest rate hikes by the U.S. Federal Reserve.

While gold is traditionally seen as an inflation hedge, it loses its appeal as a non-yielding asset in a high-interest-rate environment.

The dollar hit a more than one-year high, making bullion more expensive for overseas buyers.

Traders are pricing in three interest rate hikes from the U.S. Federal Reserve this year, compared with bets of one hike before last week's Fed meeting, according to the CME FedWatch Tool.

Investors now await the U.S. Personal Consumption Expenditures data, the Fed's preferred inflation gauge, due on Thursday, for further cues on monetary policy.

"If we continue to mostly focus on inflation and we take out the $4,000 level, then we're going to be in the direction of $3,800, and we're going to have a conversation about whether a test of $3,500 follows next," Spivak added.

Spot silver fell 1.6% to $61 per ounce, platinum lost 1.2% to $1,632.04, and palladium was down 1% at $1,225.35. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)