Gracious duke seen in tie (4)
I believe the answer is:
cord
'tie' is the definition.
(cording is a kind of tiing)
'gracious duke' is the wordplay.
'gracious' becomes 'cor' (both are exclamations of surprise**).
'duke' becomes 'd'.
'cor'+'d'='CORD'
'seen in' acts as a link.
(Other definitions for cord that I've seen before include "Rope; fabric" , "Line of twisted fibres or threads" , "Strong string" , "Small rope or thick string" , "Small rope; flex" .)