Peer with gong where personal decoration should hang (7)
I believe the answer is:
earlobe
'where personal decoration should hang' is the definition.
(as in earrings)
'peer with gong' is the wordplay.
'peer' becomes 'earl' (earl is a kind of peer).
'with' means one lot of letters go next to another.
'gong' becomes 'obe' (Order of the British Empire award or 'gong').
'earl'+'obe'='EARLOBE'
(Other definitions for earlobe that I've seen before include "It depends on the listener" , "Fleshy part of hearing organ" , "Soft part of a facial organ" , "Flap on the side of the head" , "Part of body" .)