Platinum continued its record-breaking run on Tuesday but oil and base metals fell as fears over a possible US recession were amplified by an unexpectedly sharp fall in January's ISM non-manufacturing survey.
Platinum hit a record $1,809 a troy ounce on continuing concerns about production in South Africa, which accounts for 80 per cent of global supplies, before slipping 1.5 per cent to $1,763 a troy ounce on profit-taking.
Following last week's electricity supply crisis in South Africa, power has been restored to mines but only at 90 per cent of normal requirements. Mining companies have been unable to resume production at full capacity and the outlook for the country's platinum output remains uncertain as power rationing appears likely.
Gold consolidated below $900, easing 1.4 per cent to $891.70 a troy ounce, after reaching a record $936.50 on Friday.
Nymex March West Texas Intermediate crude oil fell $1.35 to $88.67 a barrel while ICE March Brent lost $1.36 at $89.11 a barrel on recession fears.
The latest US weekly inventories data is due for release today and the market appears to be anticipating further evidence of demand softening. US refineries were expected to have reduced consumption for a fourth week with refinery utilisation expected to drop 0.2 percentage points to 84.8 per cent, according to a preliminary poll of analysts by Reuters.
US crude stocks were forecast to rise 2.2m barrels while distillate stocks (including heating oil) were expected to continue their seasonal decline with a fall of 2.1m barrels. Gasoline inventories were expected to rise for a thirteenth week with an increase of 1.9m barrels.
Nymex March heating oil slipped 3.6 cents to $2.4474 a gallon while Nymex March RBOB unleaded gasoline fell 5.2 cents to $2.2603 a gallon.
Trading in base metals was brisk in spite of the start of the new year break in China where producers have suffered upset to production due to severe winter weather and power supply disruptions.
Jiangxi Copper, China's largest producer by volume, said much of its production activities in Jiangxi province had stopped due to recent snowstorms.
In Chile, no impact was reported on the Collahuasi copper mine, which produces 8.2 per cent of the country's copper, after an earthquake struck the north on Monday.
In London, copper fell 2 per cent to $7,115 a tonne.
Citigroup cut its 2008 copper price forecast 12 per cent to $6,790 a tonne but raised its 2009 forecast 16.7 per cent to $7,716 a tonne.
John Hill said there would be contagion effects from the sharp slowdown in the US economy to China at a macro level but there had been no sign of this affecting metal markets so far.
Mr Hill said US metals demand had been weak since mid 2006 but it was now much less important as a consumer, accounting for 12 per cent of global copper demand and 16 per cent for aluminium compared with 20 per cent and 25 per cent respectively eight years ago.
"Especially important for commodity markets is that [Chinese] infrastructure spending is likely to climb, prompting upward revision to forecasts of fixedasset investment growth," he said.
Zinc dropped 3.9 per cent to $2,372.5 a tonne; aluminium lost 1.6 per cent to $2,623.5 a tonne; and nickel eased 1.1 per cent to $26,800 a tonne.
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