BLBG; Platinum Declines as Equities Slump, U.S. Growth Outlook Dims
By Dave McCombs
Nov. 6 (Bloomberg) -- Platinum fell for the first time in three days as a report that U.S. service industries plunged last month doused speculation that slumps in the world's biggest economy and demand for the metal may have reached bottom.
The metal fell after the biggest two-day rally in more than a month and tracking declines in U.S. and Asian equities, which also ended a winning streak that had pushed up the MSCI World Index 18 percent since Oct. 27.
``Further bad economic data coming out of the U.S. is turning us away from platinum,'' said Wakako Harada, a trader at Mitsubishi Corp. in Tokyo. ``If there is no signs people expect a recovery after a rate cut in Europe, platinum can fall further.''
Metal for immediate delivery dropped as much as $36 to $835.50 an ounce, 4.1 percent lower than yesterday in New York. The metal traded at $870.25 an ounce at 8:46 a.m. in London, after yesterday posting a two-day gain of 6.3 percent, the biggest since Sept. 22.
October-delivery platinum rose 2.5 percent to close at 2,740 yen a gram ($869 an ounce) on the Tokyo Commodity Exchange.
Platinum has lost 62 percent from the record high set in March as a deepening global credit crunch stymies demand for cars, which use the metal in exhaust filters. Automakers consume about 60 percent of global supplies of the metal.
Service industries in the U.S. contracted the most on record in October as credit dried up and consumers reined in spending.
The Institute for Supply Management's non-manufacturing index, which covers almost 90 percent of the economy, fell to 44.4, below economists' forecasts and the worst result since records began in 1997.
The European Central Bank will cut interest rates for the second time in less than a month today as the region's economy suffers its worst slump in 15 years, economists said.
ECB policy makers meeting in Frankfurt will lower the benchmark lending rate to 3.25 percent from 3.75 percent, according to 54 of 55 economists in a Bloomberg News survey.
To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net
