Platinum headed for a weekly drop as a continued slump in the auto industry cuts demand for the metal used to make catalytic converters. General Motors Corp. Chief Executive Officer Fritz Henderson said in a Bloomberg Television interview that bankruptcy is “probable.” Chrysler LLC is seeking to cancel 789 car-dealership agreements, according to its bankruptcy proceeding filing. “The poor outlook for U.S. auto demand has been a significant factor in platinum group metal price weakness,” said James Steel, an analyst at HSBC Securities in New York. Platinum for immediate delivery gained 0.7 percent to $1,122.75 an ounce at 9:09 a.m. Singapore time, paring the weekly drop to 2.4 percent. Palladium fell 0.6 percent to $224.50 an ounce. About half of platinum and palladium use is for auto parts, according to Johnson Matthey Plc, a London-based researcher and metal refiner. “Although platinum group metal producers have responded to poor auto catalyst and industrial demand by cutting production, it may be difficult for them to rally until global auto demand stabilizes,” said Steel. Still, platinum increased today alongside gains in equities. The benchmark MSCI Asia Pacific Index rose 1.1 percent at 9:21 a.m. Singapore time after Sony Corp. forecast a smaller loss than analysts expected, borrowing costs for banks plunged, and U.S. insurers were said to receive government funds. Some investors follow equity market moves as a gauge of economic growth.

Source