Platinum prices dropped below US$900 today in the wake of the Volkswagen emissions scandal.
The fall took the metal to its lowest level since December 2008, shortly after the financial crisis.
Many have already condemned platinum, used in catalytic converters for diesel engines.
This has been driven by the view that the VW news would lead to lower demand for diesel engines.
However, Joni Teves at UBS, suggests it could still hinge on how VW reacts to the scandal.
“Much would depend on how VW chooses to remedy the issue and how the incident will affect consumer behaviour and preferences going forward,” the analyst said.
If the reaction, like it has already been in some countries, is to ban certain makes of cars, she reckons this could spread across Europe.
However, if the reaction is to enforce stricter regulatory controls, the effect will be minimised.
The heavy losses suffered by platinum have widened the price differential between gold and platinum to over US$220 per oz, its highest level since exchange trading of platinum began in 1987.
There could be some good news, however, with Commerzbank saying the discount is likely to increase jewellery demand for platinum, which should “cushion any potentially lower demand from the automotive industry”.
Platinum was trading at US$913 an hour into trading on Wall Street, US$5 down on the day.
Elsewhere, gold was flat at US$1,132 while silver nudged 0.7% higher to US$14.70.
Major Movers
Randgold Resources (LON:RRS) up 10p to 3,861p
Fresnillo (LON:FRES) up 2p to 604p
Anglo American (LON:AAL) down 2p to 550p.