June 5 (Bloomberg) -- Platinum and palladium fell for the third straight day on speculation a slump in U.S. auto sales will erode demand for the metals used in pollution-control devices in cars.

U.S. auto sales in May tumbled 11 percent, the most this year and the seventh consecutive monthly slide. Carmakers around the globe account for more than 60 percent of platinum consumption, according to Johnson Matthey Plc, which makes about a third of the world's auto catalysts.

``In the platinum-group metals, the poor auto sales have added pressure as that would intimate less demand if this trend continues,'' Miguel Perez-Santalla, a vice president of sales at Heraeus Precious Metals Management in New York, said in an e- mail.

Platinum futures for July delivery declined $8.80, or 0.4 percent, to $1,986.10 an ounce at 11:19 a.m. on the New York Mercantile Exchange. The price fell 1 percent in the previous two days. The most-active contract has declined 14 percent from a record $2,308.80 on March 4.

Palladium futures for September delivery fell $3, or 0.7 percent, to $428 an ounce. The price dropped 2.1 percent in the prior two days. Before today, the metal gained 14 percent this year.

The decline in the metals may be limited by the euro's rebound against the dollar. The euro rose the most in two weeks after European Central Bank President Jean-Claude Trichet said an interest-rate increase in July is ``possible.'' The dollar gained six times in the previous seven sessions.

The Trichet comments ``caused the market, which of late works on sound bites, to sell dollars and buy commodities,'' Perez-Santalla said. ``All other market influences remain the same, and this will pass. I would sell into a rally.''

Platinum and palladium are also used to make jewelry.

To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net

Last Updated: June 5, 2008 11:21 EDT