Spot gold was down 1.1% at $4,142.61 per ounce

Gold ​prices dropped more than 1% on Tuesday on a firmer ‌U.S. dollar on expectations of a U.S. central bank interest rate hike this year, while investors assessed Iran-U.S. peace talks.

Spot gold was down 1.1% at $4,142.61 per ounce, as of 0414 GMT.

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 US waived sanctions on Iran for 60 days from Monday after the ​first talks under a nascent peace deal.

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 ​war in the Middle East gets resolved.

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

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