We reported just two weeks ago on the declining state of the precious metals markets. We also covered the dismal situation in the automobile industry in our piece on the changing fates of automakers and oil producers.

Of course, if you're investing in actual platinum, either as bullion or through the London-listed platinum ETF, you're also making a bet on the falling dollar. If you assume the supply and demand situation remains exactly stable, a continued decline in the dollar will mean a corresponding increase in the price of platinum. After all, that's what a weak dollar means - it takes more greenbacks to get a given level of utility today than it did yesterday. But let's let all else be equal for a moment, and focus on what's going on in the platinum business itself.

Back in December, we pointed to growing concern about the automotive use of platinum. We reported then that platinum at $1,500 an ounce was making automakers look to different metals for pollution solutions (which, with 85% of cars hitting the streets with a catalytic converter, aren't going anywhere). With prices for platinum still above these levels, and a six-month excursion into the $2,000 range, it's likely those look-sees at alternative technologies have only continued. Which in turn drives platinum demand and prices down. Which in turn makes it more viable in catalytic converters. It's that supply/demand seesaw in action again.

The Oil Ripple Effect

In this case, the bottom line is simple - oil drives the bus. The higher the price of oil for an extended period of time, the more ripple effects it will have in the global economy. Stick with us here as we dig through the many ripple effects of higher oil prices.

The first-order effects are obvious - people use less oil. This theoretically drives prices back down, but remember, lead-lag effects plague the commodities economy. In this case, lower demand for gasoline means lower margins for refiners, which means they actually make less gas, keeping prices high, at least for a while.