By Halia Pavliva Oct. 22 (Bloomberg) -- Platinum fell to the lowest in more than three years in New York as the dollar gained, cutting demand for commodities as alternative investments. Palladium also dropped. The euro sank below $1.28 for the first time since November 2006 on speculation that the European Central Bank will trim borrowing costs as the global economy heads for a recession. A rising dollar curbs interest in metals priced in the currency, including platinum, as a way to protect value. The 19-commodity Reuters/Jefferies CRB Index sank to a four-year low. ``The precious metals are off this morning mostly on the back of a stronger U.S. dollar,'' Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said today in a note to clients. ``The bear just seems to be sitting on them.'' Platinum futures for January delivery fell $25.70, or 2.9 percent, to $866 an ounce at 10:21 a.m. on the New York Mercantile Exchange. The price touched $848 earlier, the lowest since May 16, 2005. The most-active contract fell 12 percent last week and by yesterday was down 61 percent from a record $2,308.80 in March. Platinum lost 50 percent in the third quarter, including 31 percent last month, the worst such decline since at least 1986. Palladium futures for December delivery fell $3.45, or 1.9 percent, to $179.65 an ounce in New York. The most-active contract plummeted 56 percent in the third quarter, including 34 percent last month, the biggest declines since at least 1986. The CRB Index tumbled 2.4 percent to the lowest since Sept. 16, 2004. UBS Bloomberg Constant Maturity Commodity Index fell as much as 3.8 percent to the lowest since Jan. 9, 2007. Euro Falls The euro sank as low as $1.2743 before paring losses to trade at $1.2839 in New York, down from $1.3063 yesterday. Heraeus's Perez-Santalla said that since the euro fell below $1.30, it may reach $1.18, if current trends persist. The U.S. Dollar Index, which values the greenback against six major currencies, rose as much as 2.3 percent and is up 12 percent this year. Platinum and palladium are used in jewelry-making and in automobile manufacturing. Palladium is also used in dentistry. Sales of light vehicles in the U.S., the world's biggest car market, fell the most last month since January 1991. Most platinum consumption is for emissions-control parts used in exhaust systems for gasoline and diesel engines. To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.

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