Platinum, Palladium Pare Declines as Dollar Eases Gains

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"The markets have shown that hot air. . .is insufficient as fuel for bubbles."

Platinum and palladium pared earlier declines in New York as the dollar gave up gains following an unexpected drop in the U.S. unemployment rate.

The dollar climbed as much as 0.7% against the euro before retreating. Federal Reserve Chairman Ben Bernanke said today that the weak U.S. labor market and tight credit create "formidable headwinds" that will restrain economic growth. Bernanke spoke after a Dec. 4 Labor Department report of a drop in the jobless rate last month from a 26-year high in October.

"Something must be afoot in the U.S. economy," Jon Nadler, a Kitco Inc. analyst, said in a report. "The markets have shown that hot air, of the variety seen in practically every news item over the past two weeks, is insufficient as fuel for bubbles."

Platinum futures for January delivery fell $5.10, or 0.4%, to $1,444.60 an ounce on the New York Mercantile Exchange, the third straight decline. The most-active contract has climbed 53% this year.

Palladium futures for March delivery fell $4.05, or 1.1%, to $375.25 an ounce. The metal is up 99% this year.

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