January 9, 2020 / 11:37 AM / 11 days ago

PRECIOUS-Gold slides from near 7-year peak as U.S.-Iran fears subside

 (Adds details, comment; updates prices)
    * Palladium hits record peak of $2,149.50/oz
    * Dollar holds near two-week high
    * SPDR Gold holdings fell 1.05% on Wednesday

    By Diptendu Lahiri
    Jan 9 (Reuters) - Gold prices slid on Thursday, retreating
further from a near 7-year peak scaled in the previous session
as tensions between the U.S. and Iran eased following conflict
over the U.S. killing of an Iranian general.
    Spot gold        fell 0.2% to $1,552.74 per ounce by 1250
GMT, having earlier slipped to $1,539.78 an ounce. U.S. gold
futures         fell 0.4% to $1,553.70 per ounce.
    Gold had risen as much as 2.4% early on Wednesday to break
above the key $1,600 level after Iran's retaliatory attacks on
military bases housing U.S. troops in Iraq.
    U.S. President Donald Trump responded to the missile attacks
with sanctions rather than military action, while Iranian
officials said the missile attack concluded their response,
easing fears of wider conflict in the Middle East and prompting
a sell-off in safe haven assets like gold.            .
    "Since Iran and U.S. will not escalate the recent issue out
of proportion, we are seeing a little retracement after gold
broke a key technical level of $1,550," said Bernard Sin, group
head of trading at MKS.
    Holdings of the world's largest gold-backed exchange-traded
fund SPDR Gold Trust       dropped 1.05% to 886.81 tonnes on
Wednesday.          
    "While it still seemed yesterday morning that gold could
climb further on the back of the escalating situation in the
Middle East, the price correction is likely to continue in the
event of a de-escalation," Commerzbank analysts wrote in a note.
    Further weighing on gold, the dollar index        was
hovering close to a two-week high, making bullion costly for
holders of other currencies.       
    "The dollar has been on the positive side for the last 2-3
days and if it rises further, definitely we can see more
correction in gold prices," said Hareesh V, head of commodity
research at Geojit Financial Services.
    Markets are now eyeing key U.S. economic data such as the
non-farm payrolls and unemployment data on Friday.
    Among other precious metals, palladium        hit a record
peak of $2,149.50 an ounce on sustained supply concerns, and was
last down 0.7% to $2,090.06 per ounce.
    Silver        fell 0.6 % to $17.97 per ounce, after hitting
its highest since September at $18.85 on Wednesday, while
platinum        rose 0.8 to $960.98 per ounce.

 (Reporting by Diptendu Lahiri and Asha Sistla in Bengaluru;
Editing by Elaine Hardcastle)
  
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