By Halia Pavliva Dec. 17 (Bloomberg) -- Platinum rose to a two-week high in New York and palladium gained as the dollar fell, boosting demand for the metals as alternative investments. The dollar sank for a sixth straight session against the euro, declining as much as 1.6 percent, and plunged to a 13-year low against the yen after the Federal Reserve cut its target bank lending rate to as low as zero. The Fed also pledged to buy unlimited quantities of securities to lower credit costs. Some investors buy metals to preserve value when the dollar falls. “After the Fed rate cut, the precious metals rallied and have held on,” Miguel Perez-Santalla, a sales vice president a Heraeus Precious Metals Management in New York, said today in a note. “With the U.S. dollar trading over $1.4050 versus the euro, it is hard to see metals coming off at all.” Platinum futures for January delivery rose $23, or 2.7 percent, to $872.50 an ounce at 10:31 a.m. on the New York Mercantile Exchange. The price touched $878.40 earlier today, the highest for a most-active contract since Dec. 1. The metal, used in jewelry and emissions-control parts for car and truck engines, tumbled 44 percent this year before today. The first simultaneous recessions in the U.S., Europe and Japan since World War II have dragged platinum futures down 63 percent from a record $2,308.80 an ounce on March 4. Palladium futures for March delivery gained $1.45, or 0.8 percent, to $179 an ounce in New York. The price plunged 53 percent this year before today. Sliding Dollar The U.S. Dollar Index, which gauges the currency against a weighted basket of the euro, yen, U.K. pound, Canadian dollar, Swiss franc and Swedish krona, fell as much as 2.7 percent to an 11-week low. The euro touched $1.4437, the highest since Sept. 30, while the dollar sank against the yen. The Fed lowered its target rate yesterday to a range of zero to 0.25 percent, from 1 percent, below the Bank of Japan’s 0.3 percent rate. The U.S. central bank reiterated plans to buy agency debt and mortgage-backed securities and said it will study buying Treasuries, a policy known as quantitative easing. Some platinum miners in South Africa, which accounts for almost 80 percent of world supply, are reducing production as prices slump, according to David H. Brown, chief executive officer of Impala Platinum Holdings Ltd., the world’s second- biggest platinum company. Northam Platinum Ltd. doesn’t plan to scale back production in the face of falling prices, Marion Brower, a spokeswoman for Johannesburg-based Northam, said in a telephone interview today. “Platinum is holding onto its gains even against the negative declining auto-registration news out of the euro zone,” Heraeus’s Perez-Santalla said in his note. Slowing Car Sales European car sales slid 26 percent in November, the biggest monthly drop since 1999, the European Automobile Manufacturers’ Association said yesterday. Honda Motor Co., Japan’s second- largest automaker, today cut its profit forecast for the year ending in March and lowered its projection for global vehicle sales, citing the surging yen. Automakers account for 60 percent of platinum use, according to Johnson Matthey Plc, a London-based metals trader and manufacturer. To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.

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