* Platinum falls 6 percent on fears over automotive sector
* Gold drops more than 1 percent as oil tumbles
(Recasts, updates prices, market activity to New York close;
adds second byline, dateline, previously LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Aug 4 (Reuters) - Platinum fell nearly 6
percent to a six-month low on Monday, and investors worried it
could fall further in the near term after monthly U.S. car
sales slipped to a 16-year low.
The automotive industry uses about half of global platinum
supply in catalytic converters, so any slowdown in car
manufacturing could slash demand.
Spot platinum <XPT=> fell to $1,551.00/1,571.00 an ounce at
New York's last quote, having touched a session low of
$1,549.50, its weakest level since January 23, against
$1,646.50/1,666.50 an ounce late in New York on Friday.
Prices are down about 30 percent since a record high of
$2,290 in early March.
Sister metal palladium <XPD=> was down at $349.50/347.50 an
ounce from $364.00/372.00 late in New York on Friday.
"Short-term risk is to the downside, on poor numbers and
reports from the car sector and slowing demand from this
segment," said Commerzbank analyst Eugen Weinberg.
"The picture has changed completely (for platinum), from
fears over supply shortages (to worries) over slowing demand,"
he added.
In Asia on Monday, the most active contract on Tokyo
platinum futures slid by its daily 300-yen limit to its weakest
since late January as speculators sold their contracts.
Investors are worried about a slowdown in the car industry
after U.S. car sales slipped to a 16-year low in July, led by a
27 percent drop at General Motors Corp.
Investment demand for platinum also appeared softer.
London-based ETF Securities said its Physical Platinum ETF has
seen outflows of over 42,000 ounces, or 11 percent, over the
last month.
However, other traders contended that platinum should find
a bottom soon after investors unloaded the metal ferociously in
a short time.
"I think this is like the last bit of long liquidation. The
sell-off was technically overdone," said Ralph D'Esposito,
NYMEX floor trader with RJ Futures.
David Meger, metals analyst at Alaron Trading in Chicago,
said the combination of lack of physical buying and a weak
speculative interest prompted platinum to plummet recently.
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 FALLS
Gold dropped alongside crude prices. Investors use the
precious metal as a hedge against inflation, often triggered by
rising oil prices.
U.S. crude futures dropped as much as $5 on Monday to below
$130 an ounce, [] hurting bullion's inflation appeal.
The market will watch a spate of central bank meetings this
week, including Federal Reserve talks on Tuesday, to lend
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.P>,
edged up 0.1 percent to 674.02 tonnes on Friday, the trust
said. <XAUEXT-NYS-TT>
Spot gold <XAU=> ended at $895.55/896.95 by New York's last
quote at 2:45 p.m. EDT (1815 GMT), down from $909.85/911.40
late in New York on Friday.
U.S. gold for December delivery <GCZ8> ended down $9.60, or
1.1 percent, at $907.90 an ounce on the COMEX division of New
York Mercantile Exchange.
Among other precious metals, spot silver <XAG=> fell to
$17.00/17.05 an ounce from $17.47/17.55 late in New York.
(Additional reporting by Pratima Desai in London)
