Sept. 9 (Bloomberg) -- Platinum futures in Tokyo fell to the lowest in 18 months and palladium plunged as the dollar climbed to an 11-month high against the euro, damping demand for commodities as alternative investments.

The metal for August delivery has declined 12 percent this month as the dollar climbed. Palladium futures fell today to the lowest since 2005 on expectations appetite for the metal, used in auto emissions systems, will decline as demand for cars in the U.S. and Europe wanes.

``Demand for autos isn't very good, which is keeping platinum and palladium in a bearish trend,'' Kazuhiko Saito, a commodity strategist at Interes Capital Management, said today in Tokyo by telephone. ``Fund money is shifting to stocks and cash, out of commodities including platinum, gold, grains and oil.''

Platinum for August delivery dropped 5.7 percent to close at 4,444 yen a gram ($1,283 an ounce) on the Tokyo Commodity Exchange, the lowest since March 16, 2007.

Palladium for August delivery in Tokyo dropped 9 percent to 880 yen a gram after sinking to 879 yen, the lowest since Nov. 9, 2005.

The dollar rose versus the euro for a ninth day, its longest winning streak since the regional currency's debut in 1999, before a German report today that may show the nation's trade surplus shrank in July, adding to signs that Europe's largest economy is cooling.

The dollar traded at $1.4125 against the euro at 5:46 p.m. in Tokyo, from $1.4128 yesterday in New York.

Metal for immediate delivery plunged $51.50 to $1,292 an ounce at 9:47 a.m., London time, a 3.8 percent decline from New York yesterday.

Platinum for October delivery through the New York Mercantile Exchange fell $61.90 to $1,291 an ounce at the same time. NYMEX futures may drop to as low as $1,200 an ounce this month, Saito said.

To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net

Last Updated: September 9, 2008 05:10 EDT