| Platinum and palladium fell for the second straight day as U.S. auto sales extended a slump, damping demand for the metals used in pollution-control devices in vehicles.
General Motors Corp. and Ford Motor Co. said domestic sales fell at least 20 percent in August as demand for trucks continued to plunge because of record gasoline prices. Analysts had forecast a 10th straight decline. Platinum has tumbled 40 percent from a record $2,308.80 an ounce on March 4.
''We have car sales shrinking significantly on top of the problems that platinum is already having,'' said Jon Nadler, a senior analyst at Kitco Minerals & Metals Inc. in Montreal. Platinum may fall as low as $1,250, and that ''is a question of hours or days, not months,'' he said.
Platinum futures for October delivery fell $11.30, or 0.8 percent, to $1,392.20 an ounce on the New York Mercantile Exchange. The price tumbled 5.8 percent yesterday.
Palladium futures for December delivery declined $4.65, or 1.6 percent, to $288.40 an ounce. The metal fell 4.5 percent yesterday.
Ford, the second-largest U.S. automaker, said domestic sales fell 27 percent in August, the 21st decline in 22 months. This year, car and light-truck sales in the U.S., the world's largest market, are heading for the lowest level since 1993.
Dollar Rallies
Commodities dropped as energy prices fell for a fourth straight session and the dollar rose to the highest in more than seven months against the euro. European reports showed retail sales and business investment declined.
''The global slowdown is more significant than was thought, and the slowdown means less demand for stuff,'' Nadler said. ''That is on the top of the declining oil price, strengthening dollar and hedge funds exiting from commodities.''
Some investors buy precious metals priced in dollars, to hedge against inflation when the dollar falls and energy costs climb.
Platinum has dropped 8.7 percent this year, and palladium is down 24 percent.
Still, ''commodity prices may remain relatively high as long as emerging-market growth stays above about 5 percent,'' John Reade, the head of metals strategy at UBS in London, said in a report.
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