(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.