PRECIOUS-Gold steady as lower oil offsets US rate-hike fears

* Iran, Israel halt strikes on each other

* U.S. May Consumer Price Index due on Wednesday

* Traders see over 70% chance of US rate hike in December (Rewrites for Europe morning session)

By Noel John

June 9 (Reuters) - Gold held steady on Tuesday, as support from lower oil prices due to easing Middle East tensions was offset by concerns about U.S. interest rate hikes, ahead of key inflation data this week.

Spot gold was unchanged at $4,327.42 per ounce as of 0850 GMT. The metal fell to its lowest level since March 23 in the previous session.

U.S. gold futures for August delivery were down 0.3% at $4,351.30.

"Gold stabilised after a two-day slump that saw prices break below key technical support... However, rising expectations of further U.S. rate hikes continue to create a challenging backdrop for bullion," Saxo Bank analyst Ole Hansen said.

Oil prices fell after Iran and Israel said they had halted attacks on each other following an appeal from U.S. President Donald Trump.

Elevated crude oil prices stoke inflation risks, increasing the chances of higher interest rates.

Although gold is typically viewed as a hedge against inflation, it tends to lose its appeal as a non-yielding asset in a high-interest-rate environment.

Investors now await the May U.S. Consumer Price Index (CPI) data on Wednesday and Producer Price Index (PPI) data on Thursday, for clues to the Federal Reserve's next moves after a robust jobs report last week ramped up bets on a rate hike this year.

"Tomorrow's U.S. CPI, which is expected to exceed 4% in almost three years, and most certainly the 17 June FOMC meeting remains key as the market is looking for the comments and intentions from the new Fed chair," Hansen said.

Traders are now pricing in a more than 70% chance of a Fed rate hike in December, according to the CME FedWatch tool.

Spot gold closed below its 200-day moving average on Friday for the first time since October 2023 and has traded below that level since, amid rate hike fears.

"The breakout below the 200-dMA is widely considered a negative technical signal, which points to further downside potential in the near term," analysts at Citi said in a note on Monday.

Spot silver rose 0.4% to $68.48 per ounce, platinum gained 0.3% to $1,759.88, and palladium rose 1.7% to $1,225.74. (Reporting by Noel John in Bengaluru; Editing by Janane Venkatraman)