* Platinum falls as U.S. car sales slip to monthly 16-yr low
* Gold rebounds as oil ticks up, dollar steadies off highs
(Recasts, updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Aug 4 (Reuters) - Platinum extended losses in Europe
on Monday after a weak session in Asia, as investors worried
about the outlook for the automotive industry after monthly U.S.
car sales slipped to a 16-year low.
Around half of global platinum supply is used by the
automotive industry in catalytic converters, so any slowdown in
car manufacturing could have a major impact on demand.
Spot platinum <XPT=> fell to $1,617.50/1,637.50 an ounce at
0850 GMT from $1,646.50/1,666.50 an ounce late in New York.
Earlier it slid as much as 2 percent to a session low of
$1,612.50, its weakest level since January 25.
Sister metal palladium <XPD=> was little changed at
$363.50/371.50 an ounce from $364.00/372.00 late in New York.
In Asia, the most active contract on Tokyo platinum futures
<0#JPL:> slid by its daily 300-yen limit to its weakest since
late January as speculators sold their contracts.
"If platinum falls to around $1,450, and palladium to $320,
we might see some mines... starting to lose money," said
Standard Bank analyst Walter de Wet. "That is probably a
short-run floor in prices."
"The other big question is (whether) the market is still in
deficit," he added. "A lot of investors have got rid of
platinum, and demand is also now falling behind supply. If we're
not in a deficit any more, $1,500 is a possibility."
The demand drop is largely a result of a slowdown in the car
industry. U.S. car sales slipped to a 16-year low in July, led
by a 27 percent drop at General Motors Corp <GM.N>. High
gasoline prices and tight credit are buffeting the industry.
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On Friday spot platinum shed $100 an ounce after General
Motors lost another $15.5 billion, BMW issued a profits warning
and Nissan earnings fell far short of expectations.
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Investment demand for platinum also appears softer.
London-based ETF Securities said its Physical Platinum ETF
<PHPT.L> has seen outflows of over 42,000 ounces, or 11 percent,
over the last month.
Earlier this year platinum spiked up to an all-time high of
$2,290 an ounce on fears a power shortage in major producer
South Africa could seriously deepen the metal's supply deficit
this year.
GOLD REBOUNDS
Gold prices ticked up as a rebound in crude prices
encouraged buying of the precious metal as a hedge against
oil-led inflation.
Oil climbed as a tropical storm formed near the Gulf of
Mexico, seat of key U.S. oil installations, and as fresh
violence broke out in OPEC oil producer Nigeria. []
The dollar came off a five-week high against the euro on the
back of oil's high, further supporting gold's move.
[]
The precious metal typically moves in the opposite direction
to the U.S. currency, as it is often bought as a hedge against
dollar weakness.
The firmer tone the currency has taken in recent weeks is
raising fears over the outlook for gold.
"The deterioration in German economic activity and Euroland
capital flows are increasing the possibility of short-term
strength in the US dollar," said Deutsche Bank in a note.
The market will be looking to a spate of central bank
meetings this week, including Federal Reserve talks on Tuesday,
to lend fresh direction to the foreign exchange markets.
In investment news, gold holdings of the world's largest
gold-backed exchange traded fund, the SPDR Gold Trust <GLD>,
edged up 0.1 percent to 674.02 tonnes on Friday, the trust said.
Spot gold <XAG=> rose to $912.65/913.65 an ounce from
$909.85/911.45 late in New York on Friday.
Among other precious metals, spot silver <XAG=> edged up to
$17.56/17.62 an ounce from $17.47/17.55 late in New York.
(Reporting by Jan Harvey; Editing by xxxx)
