PRECIOUS-Gold slips from near 7-year high on lull in U.S.-Iran tensions

(Adds comments and updates prices)
* Palladium hits record high of $2,047.24/oz
* Silver eases from three-month peak hit on Monday
* Iran considers scenarios to retaliate - Tehran official

By K. Sathya Narayanan
Jan 7 (Reuters) - Gold prices retreated on Tuesday from near
seven-year highs reached in the previous session as investors
took profits in the absence of new developments in the tense
situation between the United States and Iran.
Deficit-hit palladium meanwhile hit another record peak on
the back of prolonged supply constraints in the market.
Spot gold XAU= was down 0.1% at $1,564.31 per ounce as of
1257 GMT, having fallen as much as 0.7% earlier in the session.
It touched its highest since April 2013 at $1,582.59 on Monday.
U.S. gold futures GCcv1 were 0.2% lower at $1,566.00.
"There is nothing fundamental going on here, it is just a
reaction to yesterday's price movement. Investors are looking at
the other side of the coin and taking some profits," ABN Amro
analyst Georgette Boele said.
The market seems a little more relaxed about the situation
in the Middle East, she added.
Prices surged on worries about an armed conflict between the
United States and Iran after a U.S.-authorised drone strike
killed a top Iranian military official on Friday.
With both sides exchanging threats of retaliation, a senior
Tehran official said on Tuesday Iran had been considering 13
"revenge scenarios" in retaliation to the air strike.

"We are far from out of the woods yet, and any signs of
hopes for an easing in tensions would be premature," Commerzbank
analyst Carsten Fritsch said.
Washington's decision to deny a visa to Iranian Foreign
Minister Mohammad Javad Zarif had added to concerns, he said.
Zarif was expected to arrive in New York for a United Nations
Security Council meeting on Thursday. "The fact that gold hasn't reacted to this news is a signal
that the market has already positioned (itself). People are long
(on gold), so I would expect some kind of correction unless you
really see an escalation," ABN's Boele said.
Other safe-haven investments, such as the Japanese yen and
Swiss franc, also pulled back after posting some solid gains in
the previous two sessions. USD/
Elsewhere spot palladium XPD= rose 0.6% to $2,042 an
ounce, having touched an all-time peak of $2,047.24 earlier in
the session.
The surge in palladium prices is predominantly due to
speculative buying, and the "higher the prices go, the sharper
the correction will be", Commerzbank's Fritsch said.
Silver XAG= slipped 0.6 % to $18.03 an ounce, after
touching a more than three-month high of $18.50 in the previous
session, while platinum XPT= advanced 0.6% to $968.50.