By Halia Pavliva Oct. 24 (Bloomberg) -- Platinum tumbled to the lowest in four years in New York as investors sold the metal as the dollar climbed against the euro and on rising concern that a global economic slowdown may cut demand. Palladium also fell. The dollar jumped as much as 3.3 percent against the euro, heading for its best week ever against the European currency. While most platinum consumption is for emissions-control parts used in gasoline- and diesel-engine exhaust systems, investors buy the metal to protect value when the dollar falls. When the currency gains, some investors sell futures to raise cash. ``The platinum group metals continue to suffer on the back of a run on investment funds,'' said Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York. ``It's a vicious circle, as the money is demanded and the funds begin to liquidate, it causes the circle to happen again and again. There is no foreseeable end in sight until these funds have been completely depleted.'' Platinum futures for January delivery fell $34.50, or 4.2 percent, to $778.10 an ounce at 10:31 a.m. on the New York Mercantile Exchange. A close at that price would mean a 12 percent decline for the week. The price touched $768.10 earlier, the lowest since July 6, 2004. Platinum dropped 12 percent last week and before today was down 65 percent from a record $2,308.80 in March. The most- active contract 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 slid $2.65, or 1.5 percent, to $170 an ounce in New York. A close at that price would mean a 2.6 percent decline from last week. The most-active contract lost 56 percent in the third quarter and 34 percent last month, the biggest such declines since at least 1986. `Chain Reaction' ``It is all a chain reaction feeding off each other,'' Heraeus's Perez-Santalla said. As investors seek the relative safety of dollars, the euro may weaken further, he said. Swedish vehicle manufacturers Volvo AB, the second-largest producer of heavy trucks after Daimler AG, and rival Scania AB reported lower-than-anticipated earnings in the third quarter today. Both said they'll cut production after industry sales fell in Europe for a fifth straight month. Volvo, based in Gothenburg, Sweden, lowered its full-year forecast for the European and North American markets. Third- quarter orders fell 30 percent at Soedertaelje, Sweden-based Scania. Both companies plunged in Stockholm trading. Auto sales in the U.S. 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. To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.

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