New York (Platts)--4Aug2008

Platinum plummeted again in New York, with the active contract crashing
under $1,600/oz for the first time since January 24 on a steady dollar and
ongoing concerns about physical demand for the metal in the automotive sector.

Platinum for October delivery, the active contract on the New York
Mercantile Exchange feel $75.30 from Friday's close to $1,580.00 at 10:54 am
EDT (14:54 GMT) on the electronic platform Globex. The metal had seen an
overnight low of $1,576 and had opened at $1,665.50, the high so far. The
contract was untraded on the floor.

Palladium also followed platinum lower, with the active September
contract shedding $10.30 to $360.80 on Globex at 10:56 am EDT (14:56 GMT). The
only floor trade so far was at 08:36 EDT, when it traded at $359.00.

Figures showing that US consumer spending and incomes cooled in June did
not help, because of the potential impact on car purchases and also the swing
physical market of jewelry, traders said. "But for the most part, the dollar
is a major fact, and people are really focused on the US automotive sector.
It's built up some momentum now, especially after the massive selloff on
Friday," said a trader.

On Friday, the active platinum contract lost $106.60 to reach a
settlement of $1,6550/oz.

"It's all built around this US car market," said an analyst. "Everyone
seems bent on it being down 25% and think that PGMs should suffer
accordingly," he added.

But he said much of the US auto catalyst market was palladium-based and
the car manufacturing levels in the emerging economies was still buoyant.

The analyst said he believed the market had been oversold to the point
that short selling had crept in, which meant that the market could easily snap
back upward quickly and rapidly on "the slightest piece of good news. It could
be very dangerous," he said.

The analyst also said that nothing had changed on the downside and that
the South African/US dollar exchange rate was beginning to hurt producers,
which could put upward pressure on platinum prices.

The analyst struggled to pinpoint support levels, but said, "I've got to
think we're getting pretty close to the bottom."

--Anthony Poole, anthony_poole@platts.com