PRECIOUS-Gold slips on rate-hike fears ahead of U.S. inflation data

(Updates with latest prices and adds comment)

* US May CPI data due on Wednesday

* Traders see about 70% chance of US rate hike in December

* Oil falls after Iran, Israel halt strikes on each other

By Anushree Mukherjee

June 9 (Reuters) - Gold prices fell on Tuesday, tracking a broader market sell-off and pressured by rising expectations of a U.S. interest rate hike this year, while investor focus turned to key inflation data due later this week.

Spot gold fell 0.7% to $4,298.75 per ounce as of 11 a.m. ET (1500 GMT), after falling more than 1% earlier in the session.

U.S. gold futures for August delivery were down 0.9% to $4,323.90.

"Traders are a little nervous with the market here... All markets across the board went into risk-off. And I think that risk-off right now is why you're seeing a down in gold," said Bob Haberkorn, senior market strategist at RJO Futures.

The tech-focused Nasdaq Composite and the benchmark S&P 500 index were down 0.9% and 0.4%, respectively.

"Gold and silver remain under pressure until we get clearer guidance from the Fed," Haberkorn added. After last week's strong job numbers, focus has shifted to key inflation data this week, including the May U.S. Consumer Price Index print on Wednesday and Producer Price Index reading on Thursday, for more clues on the U.S. monetary policy outlook.

"Should the U.S. inflation data for May also surprise on the upside on Wednesday, the gold price is likely to fall further. This also increases the potential for a recovery later in the year, should, as we expect, the Fed not raise interest rates," Commerzbank said in a note.

Traders are pricing in about 70% chance of a Fed rate hike in December, according to the CME FedWatch tool. Developments in the Middle East point to a possible peace deal, which pushed oil prices lower after Iran and Israel said they had halted attacks on each other following an appeal from U.S. President Donald Trump.

Elevated crude can fuel inflation and keep interest rates higher for longer. While gold is seen as an inflation hedge, higher rates tend to weigh on the non-yielding metal.

Spot silver fell 3.2% to $65.98 per ounce, platinum was down 1.1% at $1,736.08 and palladium lost 2.5% at $1,234.93. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Shilpi Majumdar and Jonathan Ananda)