Gold was little changed on Thursday, erasing early gains after a report that Saudi Arabia was in talks to boost crude output eased worries about soaring oil prices and escalating tensions in Libya. Saudi Arabia is in talks with European refiners affected by the disruption in Libyan exports and is willing and able to plug any supply gaps caused by unrest in Africa's third-largest producer of oil, senior Saudi sources said.
"With the news out of Saudi Arabia that it might be willing to negotiate to raise crude output, that dwindles the uncertainty for the time being," said Jeff Pritchard, broker at Altavest Worldwide Trading. Spot gold inched up 20 cents at $1,411.72 an ounce by 12:30 pm EST (1730 GMT), off a near two-month high of $1,417.92 set earlier in the session. Bullion has gained about 10 percent since late January when protests intensified in Egypt against former president Hosni Mubarak.
US April gold futures eased $1.20 to $1,412.80. Safe-haven buying of gold continued, traders said, on news that as many as 1,000 people may have been killed in Libya. Silver, which is around its highest in 31 years, eased on Thursday, in line with a decline in industrial metals.
Adding to the modest pressure on silver was a decline in imports of the metal in January by top commodity consumer China, where silver is used in industrial applications including the growing solar energy sector. Spot silver dropped 1 percent to $33.17, having touched 31-year peaks above $34 on Tuesday. Platinum fell 0.5 percent to $1,781 an ounce, while palladium was a touch lower at $776.47.
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