Gold declined from near a record on speculation that turbulence in Libya may come to an end after Venezuelan President Hugo Chavez offered to help broker a solution, cooling demand for the metal as a store of value. Immediate-delivery bullion dropped as much as 0.8 percent to $1,423.53 an ounce, before trading at $1,426.77 at 3:05 p.m. in Singapore. The metal rose to an all-time high of $1,440.32 yesterday. The April-delivery contract fell as much as 1 percent. Venezuelan President Hugo Chavez had called Libyan leader Muammar Qaddafi and offered to help create a mediation commission, the Wall Street Journal said, citing a Venezuelan government spokesman. The plan is being studied by the Arab League, Al Arabiya TV said, citing Secretary-General Amr Moussa. “Optimism that Chavez’s offer to mediate may lead to an end to the civil unrest in Libya is driving gold and oil lower,” said Hwang Il Doo, a senior trader at KEB Futures Co. “We still don’t believe gold’s bull trend will end.” Asian stocks rose 0.8 percent, reversing an earlier decline, while oil fell from a 29-month high. The Dollar Index, a six- currency gauge of the dollar’s value, dropped 0.4 percent. Libyan forces loyal to Qaddafi attacked rebels yesterday on the east coast, where much of the country’s oil is refined and shipped. The tensions, coupled with spreading unrest elsewhere in the Middle East, had driven gold and oil higher. “The events in the Middle East are a significant game changer,” Edward Meir, New York-based senior commodity analyst at MF Global Holdings Ltd., wrote in a report yesterday. Gold will do better “given that we do not expect to see any kind of quick resolution,” he said. UBS Forecast In 2010, escalating sovereign-debt levels and weaker currencies drove gold up 30 percent for a 10th annual gain. Prices may advance to $1,500 in the next six months, supported by strong Chinese demand, according to Peter Hickson, Hong Kong- based global commodities strategist with UBS AG. Prices of palladium and platinum, used in pollution-control devices, may advance on rising sales of autos, according to Barclays Capital. Precious metals had gained on the Middle East uncertainties and positive U.S. auto sales, Shiyang Wang, a New York-based analyst at Barclays Capital, said in a report. Auto dealers in the U.S. are seeing improved demand. General Motors Co. on March 1 said U.S. sales of its four remaining brands rose 49 percent in February, topping analysts’ estimates, as discounts and new financing options lured buyers. Cash silver fell 0.5 percent to $34.515 an ounce after rising to a 31-year peak of $34.985 yesterday. Palladium was little changed at $819 an ounce and platinum for immediate delivery shed 0.7 percent to $1,836.50 an ounce. To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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