To update prices and add details

June 18 (Reuters) - Gold rose more than 1 percent on Thursday, recouping some of the losses from the previous session after signals from the Federal Reserve about monetary tightening, and a drop in oil prices following a tentative agreement between the United States and Iran eased inflation expectations and provided support for prices.

Gold rose 1 percent in spot trading to $4,298.48 an ounce by 0616 GMT, after falling 1.7 percent on Wednesday following the Federal Reserve's indication of a possible interest rate hike later in the year.

U.S. gold futures for August delivery fell 1.4 percent to $4,318.10.

Kelvin Wong, a senior market analyst at OANDA, said, "It's a partial liquidation of short positions (in gold) given the sharp decline in the market yesterday, and also due to positive news coming out of the Middle East that led to a drop in oil prices."

Oil prices fell after the United States and Iran released the text of their interim agreement on Wednesday. The 14-point agreement extends the ceasefire declared in April for another 60 days to allow the two sides time to negotiate a permanent end to the war .

High oil prices fuel inflation fears and increase expectations of higher interest rates. Gold loses its appeal when interest rates are high because it does not offer a return.

"I expect gold prices to remain limited in their upward movement as market participants again anticipate the possibility that the Federal Reserve will begin its interest rate-hiking cycle," Wong said.

Projections released Wednesday showed that nine of the 19 Federal Reserve policymakers expect interest rates to rise this year. These projections came after the Fed, at its first policy meeting under chairman Kevin Warsh, decided to keep interest rates within their current range of 3.50 percent to 3.75 percent.

According to the CME Group's FedWatch service, traders now expect an 85 percent probability of a US interest rate hike in December, up from 61 percent before the Fed's decision.

As for other precious metals, silver rose 1 percent to $68.69 an ounce in spot trading, platinum climbed 0.9 percent to $1,752.45, and palladium gained 1.3 percent to $1,329.64.