Aug. 4 (Bloomberg) -- Platinum fell to a six-month low in London as declining car production in Germany, Europe's biggest economy, added to speculation of reduced demand in the biggest market for the metal. Gold, silver and palladium also dropped.

Car registrations in Germany tumbled 14 percent last month from June, according to figures today from the Frankfurt-based German carmakers' association. Platinum declined 5.9 percent on Aug. 1, the biggest slide since March 7, after U.S. auto sales unexpectedly slumped 13 percent in July.

``Both figures from Germany and the U.S. signal a major slowdown which will probably keep platinum prices depressed for the near term,'' said Manqoba Madinane, a commodity analyst at Standard Bank Group Ltd. in Johannesburg. ``What happens in the auto sector has a major impact on the supply and demand in the platinum market.''

Platinum for immediate delivery declined $78.50, or 4.7 percent, to $1,578 an ounce by 1:18 p.m. in London after earlier dropping to $1,575, the lowest since Jan. 24. Prices have fallen 19 percent in three weeks and may slide to $1,500 in a few weeks more, Madinane said.

Automobile companies use platinum in catalytic converters to reduce noxious gases in vehicle emissions. The devices accounted for 79 percent of demand in Europe last year and 86 percent of use in North America, according to catalyst manufacturer Johnson Matthey Plc.

Morning Fixing

The London morning platinum ``fixing'' price used by some mining companies to sell production dropped $86, or 5 percent, to $1,631 an ounce. Miners in South Africa led by Anglo Platinum Ltd. are the world's largest producers of platinum. Anglo Platinum fell 4 percent today in Johannesburg trading and Aquarius Platinum Ltd. dropped 7 percent in London.

Platinum climbed to a record $2,301.50 an ounce in March after cuts in electricity supply disrupted mine production in South Africa. Prices may rebound by year-end because ``we do not believe that the power-related problems in South Africa have been resolved,'' Natixis Commodity Markets Ltd. said.

Platinum may average $1,970 an ounce this year and $2,250 an ounce next year, Natixis said in an e-mailed report today. The average so far this year is $1,940.67 an ounce.

Gold for immediate delivery fell $10.30 to $900.65 an ounce as crude oil declined, eroding demand for the metal as a hedge against inflation.

Investment in funds managed by ETF Securities Ltd. rose to a record 1.8 million ounces on Aug. 1 from 1.78 million ounces the day before, according to data on the company's Web site. Platinum assets were unchanged at 364,769.295 ounces on Aug. 1.

Silver for immediate delivery dropped 16.49 cents to $17.3151 an ounce and palladium declined $11.50 to $357.25.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

Last Updated: August 4, 2008 08:26 EDT