PRECIOUS-Gold prices edge higher as U.S.-Iran tensions persist

(Recasts; adds comment, details and updates prices)
* No plans to pull troops out of Iraq: U.S. Defense
Secretary
* Palladium hits record high of $2,032.94
* SPDR Gold holdings rose to highest since Nov. 27
* Gold specs raise bullish positions in week to Dec. 31

By Asha Sistla
Jan 7 (Reuters) - Gold prices erased early losses and inched
up on Tuesday, as fears of a widespread conflict between the
United States and Iran persisted, while palladium scaled a new
high.
Spot gold XAU= rose 0.2% to $1,569.27 per ounce by 0741
GMT after falling as much as 0.7% earlier in the session, its
biggest daily percentage decline in about a month. In the
previous session, prices had touched $1,582.59, their highest
since April 2013.
U.S. gold futures GCcv1 edged 0.2% higher to $1,571.10.
Warnings of new strikes and retaliation by both the United
States and Iran stoked concerns about a broader Middle East
conflict, which led to calls in the U.S. Congress for
legislation to stop U.S. President Donald Trump going to war
with Iran. "There's no escalation in the geopolitical situation, but
the tensions have not receded completely and because of that
after a good correction in gold, prices have bounced," said
Jigar Trivedi, a commodities analyst at Anand Rathi Shares &
Stock Brokers in Mumbai.
The sentiment was also boosted after the United States
denied a visa to Iranian Foreign Minister Mohammad Javad Zarif
that would have let him attend a United Nations Security Council
meeting in New York on Thursday. Gold, considered a safe asset in times of political and
economic uncertainty, had jumped in the last two sessions on
concerns of a wider escalation after a U.S. air strike killed
Iran's top military commander Qassem Soleimani last week.
Markets were also worried about conflicting reports about
American military repositioning troops in preparation for
leaving Iraq. "If things de-escalate (with Iran), then gold will hit lower
quite quickly. We would see it go down below $1,500," said
Jeffrey Halley, a senior market analyst for the Asia-Pacific
region at OANDA.
Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust GLD , rose 0.10% to 896.18 tonnes on
Monday, their highest since Nov. 27. GOL/ETF
Speculators increased their bullish positions in COMEX gold
and silver contracts in the week to Dec. 31, data showed.
CFTC/
Elsewhere, spot palladium XPD= fell 0.3% to $2,024.86, off
an all-time peak of $2,032.94 an ounce hit earlier in the
session.
The industrial metal, suffering from sustained supply woes,
gained about 54% in 2019.
Silver XAG= rose 0.3% to $18.19 an ounce, after touching a
more than three-month high at $18.50 in the previous session,
while platinum XPT= advanced 0.5% to $967.65.