Jan. 7 (Bloomberg) -- Platinum rose, topping $1,000 an ounce for the first time since October, on speculation that demand for metals will pick up on government plans to bolster the economy. Gold and silver declined.

Platinum, used in pollution-control devices in autos, tumbled 38 percent in 2008, while gold advanced for the eighth year as a recession deepened in the U.S. Palladium and silver also dropped last year. The Federal Reserve slashed its benchmark interest rate to zero to 0.25 percent, and President- elect Barack Obama favors a $775 billion stimulus plan.

“The more-industrial metals have been beaten up, and they’re going to benefit from the infrastructure plan,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “Platinum got down to even with gold, and that’s historically cheap.”

Platinum futures for April delivery rose $21.90, or 2.3 percent, to $990.10 an ounce on New York Mercantile Exchange. Earlier, the price reached $1,011.60, the highest since Oct. 15. The metal rose to a record $2,308.80 on March 4.

Palladium futures for March delivery rose $1.50, or 0.8 percent, to $200.55 an ounce. The metal tumbled 50 percent last year.

Gold futures for February delivery declined $24.30, or 2.8 percent, to $841.70 an ounce on the Comex division of the Nymex. The metal gained 5.5 percent in 2008.

Silver futures for March delivery dropped 34 cents, or 3 percent, to $11.105 an ounce. Last year, the metal fell 24 percent.

GM Forecast

General Motors Corp. said today it has enough government loans to cover its worst-case forecast for U.S. sales and won’t need more money if the economy holds up. The U.S. Treasury has pledged $13.4 billion to help GM pay bills and $6 billion to boost lender GMAC LLC.

About 60 percent of platinum is used in catalytic converters in cars.

“GM’s statement that the government handout insures the company will not go under is giving impetus to the breakout in platinum prices,” said Ralph Preston, a commodity analyst at Heritage West Futures Inc. in San Diego.

Industrial metals are cheap compared with gold, Marc Faber, publisher of the Gloom, Boom & Doom Report, said yesterday in an interview on Bloomberg Television.

‘Totally Imploded’

“Because industrial commodities and the shares of industrial commodities and gold mining shares totally imploded last year, and the gold price continued to rise, gold is now very expensive compared with industrial commodities, the highest level in 30 years or more,” Faber said.

Platinum traded almost on par with gold on Dec. 12, when the metal closed at $822.10 while gold settled at $820.50. Gold reached a record $1,033.90 on March 17.

Gold also fell as crude oil tumbled, reducing the metal’s appeal as an inflation hedge.

Weekly petroleum inventories in the U.S. climbed more than analysts forecast, and Israel suspended fighting in the Gaza Strip for three hours to allow humanitarian aid to reach civilians. Oil futures dropped as much as 12 percent.

Still, gold may rebound with the federal-funds rate falling to a record, analysts said. Minutes of the Federal Open Market Committee on Dec. 15 and Dec. 16 signaled the rate will remain low in the long term to help the economy recover from the recession.

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, reached a record 787.9 metric tons yesterday. Assets grew 24 percent last year.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

Last Updated: January 7, 2009 14:14 EST