* Gold and mining stocks decline

* CPI inflation data due on Wednesday

* Gains in financials limit benchmark losses

Sept 26 (Reuters) - Australian shares closed lower on Tuesday dragged by the losses in gold and mining stocks, while caution ahead of headline inflation data later in the week also weighed on sentiment.

The S&P/ASX 200 index settled 0.5% lower at 7038.2 points. The benchmark rose 0.1% on Monday.

Traders in Australia await August inflation and retail sales data due on Wednesday, which will give insights on how the economy has adjusted to the rate hikes by the Reserve Bank of Australia.

"The CPI print for August will likely show evidence of growing inflationary pressures stemming from high energy prices." said Tim Waterer, chief market analyst at KCM Trade.

Gold stocks were the top losers in the benchmark index, falling 1.9% in line with weaker bullion prices, with country's largest gold miner Newcrest Mining dropping 2.1% and Northern Star Resources down 1.1%.

"Gold prices are being hampered by the ongoing USD strength and a continuation of higher U.S. treasury yields," added Waterer.

Miners lost 1.8%, weighed down by a decline in iron ore futures amid demand concerns ahead of top steel producer China's official holidays from Sept. 29.

Heavyweight mining giants BHP Group, Rio Tinto and Fortescue dropped between 1.9% and 2.1%.

The energy index slipped 0.7%, hit by a 1% slide in Woodside Energy Group and 0.5% falling Santos.

Technology stocks ended the day 1.9% lower, with local information technology firms Xero and Megaport dragging 2.6% and 0.5%, respectively.

Financials lifted the somber mood, gaining 0.1%, with the country's largest lendor Commonwealth Bank of Australia adding 0.2%.

New Zealand's benchmark S&P/NZX 50 index ended the day 0.3% lower at 11,342.87. (Reporting by Manvi Pant in Bengaluru; Editing by Rashmi Aich)