* Libya's Gaddafi agrees to Chavez's peace plan - report
* Spot gold targeting $1,450 - technicals
* Coming up: ECB rate decision; 1245 GMT
(Adds comment; updates prices)
By Rujun Shen
SINGAPORE, March 3 (Reuters) - Gold fell half a percent on
Thursday on a proposed peace plan for Libya brokered by
OPEC-member Venezuela to end violent unrest in the country.
Embattled Libya leader Muammar Gaddafi and the president of
the Arab League have agreed to a plan by Venezuelan President
Hugo Chavez to send representatives from several countries to
Libya.
"If some sort of resolution is achieved for Libya, it will
certainly affect gold -- investors will take profit and adjust
their long positions," said Ong Yi Ling, an analyst at Phillip
Futures.
Investors had not expected a prompt resolution to the Libya
crisis, and bet on further rise in gold.
Spot gold fell as much as 0.7 percent and more than
$11 from an intraday high of $1,436.15 at heel of the news. It
was trading at $1,427.44 an ounce by 0626 GMT, down half a
percent.
U.S. gold futures lost 0.7 percent at $1,428.20.
A key support level is seen around $1,420, traders said.
Investors are watching an ECB policy meeting later on
Thursday, where the central bank is expected to step up
anti-inflation rhetoric and may phase out some of its crisis
support measures.
However, most economists had expected rate hikes not to
materialise until at least October.
"Should the ECB reinforces the expectations that it will
raise interest rates sooner or later, it could take some wind
off gold's rally," said Ong.
Gold's appeal could diminish if central banks start raising
interest rates, which would ease some inflationary concerns.
Higher interest rates would raise increase the opportunity cost
of holding gold.
China, which has raised interest rates twice in the past six
months and increased bank reserve requirement ratios eight times
since the start of 2010, will probably raise them again this
month, as the world's second-largest economy battles stubborn
inflation.
In the latest data from the United States, U.S. private
sector employers added more jobs than expected last month, while
the Federal Reserve said economic activity slowly improved in
the beginning of the year.
Spot silver rose to just 2 cents below the 31-year
high of $34.96 an ounce hit on Wednesday, before dropping nearly
40 cents to $34.50.
Spot platinum fell 0.9 percent at $1,829.63, snapping
a four-day winning streak.
Precious metals prices 0626 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1427.44 -7.05 -0.49 0.56
Spot Silver 34.50 -0.17 -0.49 11.80
Spot Platinum 1829.63 -16.11 -0.87 3.52
Spot Palladium 814.73 -1.99 -0.24 1.90
TOCOM Gold 3766.00 -10.00 -0.26 0.99 67566
TOCOM Platinum 4890.00 -6.00 -0.12 4.13 19438
TOCOM Silver 90.10 -0.50 -0.55 11.23 1372
TOCOM Palladium 2160.00 10.00 +0.47 3.00 646
COMEX GOLD APR1 1428.20 -9.50 -0.66 0.48 16009
COMEX SILVER MAY1 34.53 -0.31 -0.88 11.60 4779
Euro/Dollar 1.3864
Dollar/Yen 81.83
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Editing by Ed Lane)
Reuters
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