(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 XAU= 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 GCcv1 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. MKTS/GLOB .
"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 GLD dropped 1.05% to 886.81 tonnes on Wednesday. GOL/ETF
"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 (DE:CBKG) analysts wrote in a note.
Further weighing on gold, the dollar index .DXY was hovering close to a two-week high, making bullion costly for holders of other currencies. USD/
"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 XPD= 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 XAG= fell 0.6 % to $17.97 per ounce, after hitting its highest since September at $18.85 on Wednesday, while platinum XPT= rose 0.8 to $960.98 per ounce.