Platinum, palladium down on auto sector problems

Precious metals prices were lower around noon in New York on Tuesday as investors worried about demand.

Platinum and palladium were both lower on worries that trouble for automakers will cut demand for the metal, which is used in the manufacture of motor vehicle pollution control devices.

Shares of General Motors (NYSE: GM) were as low as they have been since 1942 in morning trade in New York on fears that the automobile manufacturer could collapse.

GM was down 15.18 prcent at about 12:30 p.m. in New York after falling 17 percent below Monday’s close in morning trade.

There are predictions that GM, whose shares dropped 23 percent on Monday, could run out of cash by the end of the year if it does not get a government bailout, and the carmaker announced more job cuts Tuesday morning after a similar announcement just last Friday.

January platinum was down $35.10 to $824.80 per troy ounce at last report, while December palladium had dropped $2.50 to $219.50 per troy ounce.

December gold was down $15.90 to $730.60 per troy ounce on concerns that the global economic situation will reduce demand for both precious and base metals, while silver dropped 50 cents to $9.72 per troy ounce.

Meanwhile, among base metals, copper prices fell on data showing that exports from China grew at the slowest pace in four months in October, as equities markets declined globally, and as home sales in the UK were at their lowest level in 30 years.

One of the most common uses for copper is in home construction.

December copper was down 9 cents to $1.67 per pound in New York trade, while three-month copper dropped $245 to $3,630 per tonne, a decline of 6.3 percent, on the London Metal Exchange.