PRECIOUS-Gold, silver retreat from highs along with crude

* Gold, silver retreat from from highs

* Fed monetary policy, inflation in focus

* Coming up: U.S. import/export prices on Tuesday (Recasts, updates prices, adds comment, link to graphic, changes dateline, previously LONDON)

By Frank Tang

NEW YORK, April 11 (Reuters) - Signs of a possible Libyan peace deal knocked gold down from a record high hit early on Monday on the back of a weaker dollar and inflation worries, while silver backed off from a 31-year high but was still on track for its ninth straight gain.

Fading safe haven demand undermined bullion after it hit $1,476.21 an ounce for the first time, and weaker oil was also a negative after the African Union signaled progress in Libyan peace talks.

Spot gold was down 0.5 percent at $1,465.76 an ounce by 12:37 p.m. EDT (1637 GMT). U.S. gold futures for June delivery were last off $7.50 at $1,465.90.

Spot silver retreated from its session high $41.93, the strongest since 1980. May silver recovered from a brief dip into negative territory and was up 11.7 cents at $40.725.

The gold-to-silver ratio -- the number of silver ounces needed to buy an ounce of gold -- fell to a 28-year low toward 35 on Friday. (Graphic: http://r.reuters.com/jyx88r)

"There is a lot of retail flows into silver products, particularly coins. Many smaller investors are allocating more of their portfolios to silver today," said Robert Lutts, Chief investment officer of Cabot Money Management, a wealth manager with about $500 million client assets.

Fund managers and analysts said that silver is expected to outperform gold in this environment because the white metal bears a higher risk and price volatility than gold.

Investor money has flowed into to commodities in general and precious metals in particular this month as investors worry about the potential for rising inflation in developing markets and changes to monetary policy in the United States.

A weaker dollar initially lifted gold. Analysts said the dollar could further weaken because of the widening interest rate differentials after ECB's first interest rate hike after the 2008 financial crisis last week.

Janet Yellen, the Fed's vice chair, said the U.S. central bank's ultra-loose monetary policy remains appropriate given high unemployment and tame underlying inflation trends. [ID:nWALBFE75X]

Gold has been a major beneficiary since the Fed has kept short-term rates near zero since December 2008.

Among other precious metals, platinum was down 0.7 percent at $1,790.24 an ounce, while palladium eased 0.2 percent at $789.47. Prices at 12:44 p.m. EDT (1644 GMT)

LAST NET PCT YTD

CHG CHG CHG US gold 1467.40 -6.70 -0.5% 3.2% US silver 40.730 0.127 0.3% 31.7% US platinum 1797.60 -14.50 -0.8% 1.1% US palladium 789.70 -4.50 -0.6% -1.7% Gold 1466.30 -6.40 -0.4% 3.3% Silver 40.69 -0.16 -0.4% 31.9% Platinum 1791.49 -12.26 -0.7% 1.4% Palladium 786.97 -3.78 -0.5% -1.6% Gold Fix 1468.00 -1.50 -0.1% 4.1% Silver Fix 41.37 115.00 2.9% 35.1% Platinum Fix 1802.00 2.00 0.1% 4.1% Palladium Fix 795.00 0.00 0.0% 0.5% (Additional reporting by Jan Harvey in London; Editing by Alden Bentley)