By Halia Pavliva Oct. 23 (Bloomberg) -- Platinum tumbled to the lowest in four years in New York on concern that a global economic slowdown may further reduce demand for the metal used in car parts and jewelry. Palladium also declined. Daimler AG, the world's second-biggest maker of luxury automobiles, cut its full-year earnings forecast. The reduction came hours after Fiat SpA, Italy's largest carmaker, forecast a plunge in profit of as much as 85 percent next year if a global financial crisis continues to sap credit and depress sales. ``The unanimous view that industrial commodities will trade lower due to a global economic slowdown is a clear sign of capitulation and while this does not mean that prices will now bounce, it is a sign that we are approaching the end,'' John Reade, the head of metals strategy at UBS AG in London, said today in a research report. Platinum futures for January delivery fell $52, or 6.1 percent, to $805.20 an ounce at 10:06 a.m. on the New York Mercantile Exchange. The price touched $789.70 earlier, the first time the most-active contract has traded below $800 in four years and the lowest since July 7, 2004. Platinum fell 12 percent last week and was down 63 percent from a record $2,308.80 in March before today. 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 $6.10, or 3.4 percent, to $174 an ounce in New York. The most-active contract lost 56 percent in the third quarter and 34 percent last month, the biggest such declines since at least 1986. Daimler Outlook Daimler cut its full-year earnings forecast by 1 billion euros ($1.3 billion) after third-quarter profit fell short of analyst estimates. Daimler, behind only Bayerische Motoren Werke AG in luxury car sales, cited slowing Mercedes-Benz revenue. Fiat forecast profit of as little as 400 million euros next year, if demand slumps 20 percent. The company has forecast 2008 profit of 2.6 billion euros this year. Auto sales in the U.S., where Daimler sells the most cars after Germany, fell for an 11th straight month in September, dropping 27 percent in the steepest slide since 1991. In Europe, car sales slumped 8.2 percent in September as the market suffered its worst decline since 2005. Most platinum consumption is for emissions-control parts in car and truck exhaust systems. ``The cancellation of projects from the smaller players in the South African platinum industry look inevitable following the declines in the platinum group prices recently,'' Reade said in the note. Platinum will swing from a deficit to the largest surplus in 10 years as the slowing global economy cools demand, Paul Walker, chief executive officer of London-based research company GFMS Ltd., said last month. Production of platinum fell short of demand in eight of the past nine years, according to London-based Johnson Matthey Plc, the maker of about a third of the world's auto catalysts. Platinum demand outpaced production by 480,000 ounces last year, the largest deficit since 2002, Johnson Matthey has said. To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.

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