Platinum Declines in London as Weaker Car Sales Curb Demand

By Nicholas Larkin

Jan. 13 (Bloomberg) -- Platinum fell for a second day in London as a decline in car sales trimmed demand for the metal used in autocatalysts. Gold was steady close to a one-month low.

PSA Peugeot Citroen, Europe’s second-biggest carmaker, reported vehicle sales fell 8.7 percent last year. Vehicle sales in China may climb at the slowest pace since 1998, the China Association of Automobile Manufacturers said yesterday.

“The last few months of the year was pretty poor” for Chinese carmakers, Afshin Nabavi, a senior vice president at MKS Finance SA, one of Switzerland’s four bullion refiners, said by phone from Geneva.

Platinum for immediate delivery dropped as much as $35.50, or 3.7 percent, to $923 an ounce and traded at $940.50 by 9:29 a.m. in London. The metal had advanced as much as 6.3 percent this year and is now little changed. It fell 39 percent last year, its worst performance since at least 1987.

Automakers account for about half of global platinum and palladium consumption, according to estimates by Johnson Matthey Plc, a London-based metals refiner, trader and researcher. The figures take recycling into account.

Gold for immediate delivery declined as much as $5.05, or 0.6 percent, to $815.80 an ounce and last traded little changed at $819.89 an ounce. The metal has declined 7.1 percent this year. February futures lost $1.40, or 0.2 percent, to $819.60 in electronic trading on the Comex division of the New York Mercantile Exchange.

The dollar strengthened against the euro on speculation the European Central Bank will reduce interest rates this week, diminishing the appeal of precious metals as an alternative investment.

Among other metals for immediate delivery in London, silver added 0.1 percent to $10.67 an ounce and palladium was 1.5 percent lower at $183.75 an ounce.

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net