Palladium and platinum plummeted again Thursday as investors barreled out of risky investments and sought the relative safety of the dollar and U.S. Treasuries.
The pair of highly volatile metals have tumbled on fresh fears that Europe won't be able to contain its growing debt problems. Palladium fell more than 19 percent in the past two days, and platinum is off nearly 12 percent.
"You're continuing to see a broad-based sell-off in everything," said Matt Zeman, head trader at LaSalle Futures Group in Chicago. He said investors are concerned that the euro, which is used by 16 countries, could eventually collapse.
The euro fell again Thursday and is hovering near a four-year low. Major stock indexes in the U.S. and Europe fell sharply. The Dow Jones industrial average sank about 275 points, or 2.6 percent.
Zeman said risk aversion is likely to continue until European leaders can get a handle on the continent's debt crisis and investors can better determine if deep budget cuts in countries like Greece, Spain and Portugal will stunt a global economic recovery.
Palladium and platinum, which are normally volatile, have been hurt even more than other commodities in recent days. Investors looking to avoid risk are likely to pull out of more volatile assets first, particularly if they can take some profits in the process. Palladium and platinum had risen sharply much of the year until the recent pullback.
Both metals are also are used heavily in manufacturing, and tend to respond to shifts in sentiment about the economic outlook.
Palladium for June delivery fell $50.75, or 11 percent, to settle at $408.95 an ounce. Platinum for July delivery dropped $109.90, or 6.8 percent, to $1,495.80 an ounce.
Growing concerns about Europe's debt problems this month have helped erased most of the two metals gains' for the year.
Like palladium and platinum, oil has also dropped as investors cut back their exposure to riskier assets.
Oil for June delivery fell $2.10, or 3 percent, to $67.77 a barrel on the New York Mercantile Exchange. The contract expires Thursday, so much of the trading has already migrated to the July contract, which fell $2.64, or 2.6 percent, to $69.84 a barrel.
In other June contracts, heating oil fell 5.88 cents, or 3 percent, to $1.8864 a gallon, while gasoline dropped 6.84 cents, or 3.4 percent, to $1.9468 a gallon.
Declines in gold and silver were more modest because the pair have been popular alternatives to currencies in recent weeks. Investors view the precious metals as safe-havens when there is uncertainty in the market.
However, each hit record highs last week so there has been some pullback from those levels as investors take some profit.
Gold for June delivery fell $4.50 to $1,188.60 an ounce. July silver dropped 40 cents to $17.715 an ounce.
Elsewhere, grain and bean prices were mixed. Wheat for July delivery fell 0.25 cents to $4.69 a bushel. Soybeans were down 0.5 cent at $9.38 a bushel and corn rose 1.25 cents to $3.605 a bushel.
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