* U.S. April CPI data due at 1230 GMT

* Trump calls Iranian counterproposal 'garbage'

* Trump to visit China this week, to discuss Iran with Xi

(Updates prices for European mid-session trade)

By Noel John

May 12 (Reuters) - Gold fell from a three-week high on

Tuesday, as slim hopes of a U.S.-Iran peace deal drove the

dollar and oil prices higher, clouding the U.S. interest rate

outlook ahead of key inflation data.

Spot gold fell 0.8% to $4,696.07 per ounce by 1117

GMT, after climbing to its highest since April 21 earlier. U.S.

gold futures for June delivery lost 0.5% to $4,703.20.

U.S. President Donald Trump said a ceasefire with Iran was

"on life support" as Tehran rejected a U.S. proposal to end the

conflict and stuck to a list of demands the U.S. president

described as "garbage".

"The overall driver (for gold's decline) is rising energy

prices once again lifting U.S. bond yields ahead of today's CPI

(consumer price index) print, as well as a stronger dollar,"

said Ole Hansen, head of commodity strategy at Saxo Bank.

Oil climbed as the key Strait of Hormuz stayed largely

closed.

The April inflation data, expected later in the day, could

provide clues on the Federal Reserve's monetary policy

direction.

Elevated crude oil prices can stoke inflation, increasing

the likelihood of higher interest rates. While gold is seen as a

hedge against inflation, high rates tend to weigh on the

non-yielding asset.

Benchmark 10-year U.S. Treasury yields hit a

one-week high, while the dollar gained 0.4%, making

dollar-denominated commodities more expensive for holders of

other currencies.

Traders have largely priced out a Fed rate cut this year,

with markets now seeing a 36% chance of a hike by March 2027,

according to CME Group's FedWatch tool.

Markets are also watching Trump's two-dayvisit to Chinafrom

Wednesday, during which he is set to meet Chinese President Xi

Jinping, with the Middle East expected to be a key part of the

agenda.

"Overall, gold remains rangebound, with support established

ahead of $4,500, while resistance is at the 50-day moving

average, near $4,757," said Hansen.

Spot silver fell 3% to $83.50 per ounce, platinum

slid 2.7% to $2,077.44, and palladium was down

1.9% at $1,479.91.