* News Saudi to boost crude output eases safe-haven buying
* US oil prices tumble 2 pct late on Gaddafi shot rumor
* Unrest in Libya to underpin gold prices
* Coming up: U.S. fourth-quarter GDP data due Friday
(Recasts lead)
By Frank Tang
NEW YORK, Feb 24 (Reuters) - Gold eased below $1,400 an
ounce on Thursday as safe-haven buying dried up when an oil
rally fizzled on news Saudi Arabia was in talks to boost crude
output and a trade rumor that Libyan leader Muammar Gaddafi had
been shot.
Gold came under pressure late as U.S. crude futures <CLc1>
tumbled 2 percent, with traders citing rumors that Gaddafi had
been shot. Other markets did not immediately react to the
rumors. []
The U.S. government said it had no reason to believe
Gaddafi was dead. As the rumor spread among oil traders, there
was no indication of where it originated or any news to
substantiate it. []
Earlier, oil eased off 2-1/2-year highs on news that Saudi
Arabia was in talks with European refiners affected by the
disruption in Libyan exports. Senior Saudi sources said the
kingdom was ready to plug any supply gaps caused by unrest in
Africa's third-largest producer of oil. []
"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.
U.S. April gold futures <GCJ1> settled up $1.80 at
$1,415.80, with volume largely in line with the 30-day
average.
Later, spot gold <XAU=> was off 0.5 percent to $1,404.40 an
ounce by 2:50 p.m. EST (1950 GMT), off a near two-month high of
$1,417.92 set during the session. Bullion has gained about 7
percent since late January when protests intensified in Egypt
against former president Hosni Mubarak.
Also eating into safe-haven buying, Wall Street stocks
turned slightly higher after a sharp slide early in the week.
[]
Chaos in Libya should underpin gold buying, traders said,
as France's top human rights official said up to 2,000 people
might have died so far in the uprising since Feb. 15.
[]
"The major factor currently for commodities in general
including gold is the situation in Libya and fears it might
spread over to other oil-producing countries in the Middle East
and North Africa," said Peter Fertig, a consultant at
Quantitative Commodity Research.
"It is the safe haven aspect which plays a role and also
the rise of crude oil, which could translate sooner or later in
rising CPI figures."
On charts, gold's uptrend was intact, targeting a test of
$1,450 an ounce -- the 161.8 percent Fibonacci projection
level, saiD a Reuters market analyst. (Graphic:
http://link.reuters.com/gub38r )
GOLD HEDGE
Investors often buy gold to protect portfolios against
rising inflation expectations that could erode returns on bonds
or cause currencies to lose purchasing power.
Unrest in North Africa and the Middle East boosted other
safe-haven assets such as the Swiss franc, which hit a record
against the dollar <CHF=>.
Investor interest in gold has not translated into inflows
into major exchange-traded products, such as the SPDR gold
trust <GLD>, or ETF Securities' gold funds, since the protests
in Egypt in late January.
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 <XAG=> dropped 2.3 percent to $32.73, having
touched 31-year peaks above $34 on Tuesday.
Reflecting healthy investor interest in silver, where the
futures market shows near-term prices are now above those for
later delivery, holdings in the world's largest silver-backed
ETF, the iShares Silver Trust <SLV>, rose to one-month highs.
Platinum <XPT=> inched up 50 cents to $1,782 an ounce,
while palladium <XPD=> slipped 0.4 percent to $773.22.
Prices at 2:52 p.m. EST (1952 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1415.80 1.80 0.1% -0.4%
US silver <SIH1> 33.166 -0.132 0.0% 7.2%
US platinum <PLJ1> 1786.80 10.10 0.6% 0.5%
US palladium <PAH1> 777.75 3.20 0.4% -3.2%
Gold <XAU=> 1405.10 -6.42 -0.5% -1.0%
Silver <XAG=> 32.71 -0.80 -2.4% 6.0%
Platinum <XPT=> 1782.00 0.50 0.0% 0.8%
Palladium <XPD=> 773.75 -2.75 -0.4% -3.2%
Gold Fix <XAUFIX=> 1411.50 -3.00 -0.2% 0.1%
Silver Fix <XAGFIX=> 33.28 -1.00 0.0% 8.7%
Platinum Fix <XPTFIX=> 1772.00 0.00 0.0% 2.4%
Palladium Fix <XPDFIX=> 770.00 3.00 0.4% -2.7%
(Additional reporting by Amanda Cooper and Rebekah Curtis in
London and Rujun Shen in Singapore; Editing by David Gregorio)
