By Halia Pavliva Nov. 10 (Bloomberg) -- Platinum and palladium fell as German investor confidence declined more than economists forecast in November and the dollar rebounded against the euro, cutting demand for the metals as alternative investments. An index of investor and analyst expectations that forecasts developments in six months dropped to 51.1 from 56 in October, according to the ZEW Center for European Economic Research in Mannheim, Germany. The dollar rose as much as 0.4 percent against the euro, after dropping 1 percent yesterday. Most platinum is used in auto parts and jewelry. “The very weak consumer confidence report in Germany points to weaker demand for autos,” Miguel Perez-Santalla, a Heraeus Precious Metals Management sales vice president in New York, said in an e-mailed note. Platinum futures for January delivery fell $16, or 1.2 percent, to $1,351.20 an ounce on the New York Mercantile Exchange. The metal has climbed 44 percent this year as the dollar dropped 6.7 percent against the euro. Today’s “softer tone in platinum is a function of a slightly firmer dollar,” said Ralph Preston, a Heritage West Futures Inc. analyst in San Diego. “However, overall the market is bullish and a close above $1,380 an ounce should trigger buying on the part of aggressive traders.” Palladium futures for December delivery fell 75 cents, or 0.2 percent, to $335.20 an ounce in New York. The metal is up 78 percent this year. Platinum ‘More Robust’ “Platinum looks more robust than palladium, and with palladium now running into considerable overhead supply, the rally may start to struggle,” analysts at metals trader ScotiaMocatta said in a report e-mailed today. “The moves up to current levels may have run ahead of themselves,” despite “strong medium-to-long term outlooks” for both metals, the unit of the Bank of Nova Scotia said. “The fundamentals behind most of the metals do not justify the lofty valuations, and it is mainly fund flows and currency factors that are driving the advance,” Edward Meir, an MF Global Ltd. analyst in Darien, Connecticut, said today in a report. “Most troubling to us, is that metal stocks are continuing to push higher, telling us that although demand may be improving, supply is still more than comfortable to accommodate any such increase.” To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.

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