By Halia Pavliva Dec. 5 (Bloomberg) -- Platinum fell, capping the biggest weekly drop in almost two months, on speculation that demand may weaken as U.S. unemployment climbs and the recession deepens. Palladium plunged 5.5 percent to the lowest since July 2003. Employers cut jobs last month at the fastest pace in 34 years, carving out 533,000 positions and bringing losses this year to 1.91 million, the U.S. Labor Department said today in Washington. The unemployment rate rose to 6.7 percent, the highest since 1993. Platinum, mostly used in auto parts, has fallen 48 percent this year as the U.S. economy weakened. “Platinum’s bearish market sentiment was punctuated by today’s disappointing U.S. unemployment numbers and continued concerns that the Big Three automakers will be forced to cut more jobs,” Ralph Preston, a futures analyst at Heritage West Futures Inc. in San Diego, said in an e-mailed note. “This fundamental environment is the stage for another leg down in platinum prices.” Platinum futures for January delivery fell $11.60, or 1.5 percent, to $787.20 an ounce on the New York Mercantile Exchange. The metal has fallen 11 percent this week, the fifth weekly decline of more than 10 percent this year. “A break of the multiweek channel below $780 an ounce could trigger a sell signal for aggressive technical traders,” Preston said. Palladium futures for March delivery fell $9.55 to $162.70 an ounce in New York, after touching $160.30, the lowest for a most-active contract since July 23, 2003. The price has fallen 16 percent this week and is down 57 percent this year. Payrolls are likely to keep sliding into next year as the collapse in credit and slumping spending hurt companies from General Motors Corp. to Citigroup Inc. and AT&T Inc. Plunging Auto Sales Auto sales in the U.S., the world’s biggest market, plunged 37 percent in November from a year earlier, with cars and light trucks selling at the lowest annual rate in 26 years, industry reports showed earlier this week. Automakers account for more than 60 percent of global platinum consumption, according to estimates by Johnson Matthey Plc, a London-based metals refiner, trader and researcher. Palladium is also used to make catalytic converters for car and truck exhaust systems. Jewelry makers also use both metals. To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.

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