Gold may decline in London as some investors sell the metal after its rally to a record and after the African Union said Libyan leader Muammar Qaddafi agreed to a cease-fire. Silver climbed to a 31-year high. Libya’s rebels said a plan proposed by the African Union and agreed to by Qaddafi won’t be acceptable if it allows the ruler and his sons to retain power. Germany warned that deficit- scarred Greece might need more financial relief as Portugal seeks an 80 billion-euro ($116 billion) aid package. U.S. reports this week may show inflation is quickening, economists said. “Profit-taking has emerged” and “a further pullback could be seen” on news that Qaddafi accepted a peace proposal, James Moore, an analyst at TheBullionDesk.com in London, said in a report to clients today. Still “ongoing concerns of European Union debt, low interest rates and ongoing inflation concerns are bullish” for gold, he said. Immediate-delivery bullion fell $2.36, or 0.2 percent, to $1,472.56 an ounce by 9:38 a.m. in London. Prices earlier today gained as much as 0.2 percent to an all-time high of $1,478.18. Gold for June delivery was little changed at $1,473.70 an ounce on the Comex in New York after reaching a record $1,478. The difference between yields on U.S. 10-year notes and Treasury Inflation Protected Securities, a gauge of traders’ expectations for inflation, widened to as much as 2.66 percentage points, the most since March 2008. Reports this week may show U.S. consumer prices rose 0.5 percent last month from February, and wholesale prices and the cost of goods imported into the U.S. climbed, according to Bloomberg surveys of economists. Fought to Stalemate After almost two months of fighting, Libyan rebels and troops loyal to Qaddafi have fought to a stalemate. Qaddafi agreed to accept a peace plan that called for a cease-fire with rebels, the African Union said. There was no mention of Qaddafi agreeing to step down. Gold held in exchange-traded products rose 19.98 metric tons to 2,049.15 tons on April 8, the highest level since Jan. 24, data compiled by Bloomberg from ten providers show. UBS AG today raised its one-month bullion forecast to $1,500, from $1,450. Silver for immediate delivery climbed as much as 2.5 percent to $41.9525 an ounce, the highest level since January 1980, the year the metal reached a record $50.35 in New York. It last traded at $41.285. An ounce of gold bought as little as 35.16 ounces of silver in London today, the least since September 1983, data compiled by Bloomberg show. Silver $50 Target “We continue to believe that silver will reach $50, based nearly exclusively on speculator activity,” Edel Tully, a UBS analyst in London, said today in a report to clients. “Silver could surge to $45 this week, before very quickly surrendering double-digit percentage gains. It takes a brave investor to buy silver right now.” Silver ETP holdings gained 30.36 tons to 15,453.45 tons on April 8, the highest level since at least February last year, data from four providers show. Palladium was little changed at $797.25 an ounce after reaching $805.13, the highest price in a month. Platinum declined 0.5 percent to $1,804.68 an ounce. It earlier today reached a one-month high of $1,818.75. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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