(Updates prices as of 0744 GMT)

* U.S. Vice President Vance says progress made in talks

with Iran

* Benchmark 10-year Treasury yields near a

more-than-one-year high

* Minutes from Fed's April policy meeting due at 1800 GMT

* U.S. Fed to avoid cutting rates this year - Reuters

poll

By Pablo Sinha

May 20 (Reuters) - Gold prices steadied near a

one-and-a-half-month low on Wednesday, as high Treasury yields

and a firm dollar almost offset the optimism surrounding a

potential U.S.-Iran peace agreement.

Spot gold was at $4,481.48 per ounce, as of 0744 GMT,

after earlier falling to its weakest level since March 30. U.S.

gold futures for June delivery lost 0.6% to $4,483.70.

"Gold is running out of puff somewhat against this backdrop

of rising yields, and a dollar which has a spring in its step

courtesy of the hawkish shift in the rates outlook," said Tim

Waterer, chief market analyst at KCM Trade.

The dollar hovered at a six-week high, making

greenback-priced bullion more expensive for holders of other

currencies.

Benchmark 10-year U.S. Treasury yields were steady

at a more-than-one-year high, raising the opportunity cost of

holding non-yielding gold.

U.S. signals on Iran remained mixed. Vice President JD Vance

said both sides were making progress and did not want a return

to conflict, while President Donald Trump warned Washington may

still need to strike Tehran.

Philadelphia Federal Reserve Bank President Anna Paulson said

the current level of interest rates is appropriate for the

moment, putting downward pressure on inflation at a time when

price pressures remain elevated.

She, however, said it was "healthy" that investors had begun

considering scenarios where rates might need to rise.

The Federal Reserve will avoid cutting rates this year,

according to most economists polled by Reuters who largely

pushed long-held calls for reductions into 2027 on hopes the

current inflation flare-up is temporary.

Investors are waiting for minutes from the Fed's April

policy meeting, due later in the day, to gauge the U.S. central

bank's monetary policy outlook.

Spot silver rose 1.6% to $75 per ounce, platinum

gained 0.7% to $1,934.80, and palladium was up

1.8% to $1,378.25.