* China cuts rates again, eyes on U.S., Japan
* Gold rises for third day, copper up more than 2 percent
* Oil snaps three-day losing streak
(Updates throughout, changes dateline from SINGAPORE)
LONDON, Oct 29 (Reuters) - Commodities from gold to grains rose on Wednesday as China cut rates and stock markets rebounded on hopes of the same from the United States and Japan, but the spectre of waning demand continued to worry investors.
China cut its interest rates for the third time in six weeks, prompting speculation of coordinated action on rates by central banks. [nBJC000218
Crude oil snapped a three-day losing streak to stand above $66 a barrel, London copper futures gained more than 2 percent, and gold rose above $750 an ounce as strong equity markets and a weaker dollar brought investors back into commodities.
Spot gold was quoted at $763.10/765.60 an ounce at 1235 GMT, up from $744.30 in late New York trade on Tuesday.
But analysts warned there was still more bad news ahead, with the economic picture set to deteriorate and demand slacken for grains and base metals.
"I'm not sure there is anything overly fundamental out there in terms of improved demand," said Andrew Keen, an analyst at Sanford C. Bernstein Research.
"What you're seeing is a bit of a bounce off the bottom."
"The metals complex and the equities are mostly trading on a global macro trade. Any incremental reasons for a bit of a relief rally are probably going to help both," he added.
Oil and other commodities have tracked stock markets closely in recent months as investors divide assets along risk profiles, switching between them to protect themselves from the whiplash of the worst financial crisis in 80 years.
European shares surged more than 5 percent, while major rallies in the U.S. and Asian equity markets provided a boost to investors worried over the state of battered economies.
A reduction in U.S. rates is widely expected by markets, but the scope of the cut is uncertain.
"After a 66 percent probability of a 50 basis point rate cut yesterday, interest rate futures now pencil in 62 percent - which demonstrates the uncertainty of financial market participants," said Standard Bank analyst Manqoba Madinane.
U.S. light crude for December delivery was up $3.87 at $66.60 a barrel by 1235 GMT. On Monday, it fell to a 17-month low of $61.30.
China's rate cut provided evidence that the economic slowdown is starting to affect emerging markets.
"There's building evidence in China that the slowdown we're seeing everywhere else is taking place there as well," said Derek Halpenny, European head of FX research at BTM-UFJ.
Oil has fallen more than 50 percent from a record $147.27 in July, as the credit crisis has spilled into the real economy and dampened demand for oil in industrial countries.
Merrill Lynch has cut its U.S. crude oil price forecast for the fourth quarter of 2008 to $78 a barrel from $107 a barrel.
"Demand for physical commodities is tanking in many parts of the world, with U.S. oil consumption contracting at the sharpest rate since 1980," the bank said.
"More importantly we are starting to see signs of oil demand slowing in emerging markets."
Copper for three month delivery on the London Metal Exchange rose to $4,280 from $4,130 at the close on Tuesday and compared with a session high at $4,325.
Prices of the metal used in power and construction have fallen by more than 50 percent since a record $8,940 in July, partly on fears of slowing demand from China.
"There was clear evidence that growth in China was slowing both in data and officials saying that ... we'll see more moves to stimulate growth over the next six months or so - everywhere but specifically in China," said Calyon analyst Robin Bhar.
Aluminium hit $2,154.75 a tonne, its highest in over one week, and was last at $2,146 from $2,105. Nickel rose as much as 6.9 percent at $12,800 but was last at $12,550 from $11,970 at the close on Tuesday.
Lead was at $1,515 from $1,470, while zinc rose 7 percent to $1,230 before tracking back to $1,222 from $1,150. Tin rose 3.1 percent to $15,200 but was last at $15,000 from $14,750.
U.S. soybeans rose 3.2 percent, boosted by the gains in global stock markets and oil. Wheat and corn advanced more than 2 percent as traders took the view that markets had been oversold on fears of a prolonged recession.
(Reporting by Jan Harvey, Michael Taylor, Jane Merriman, Sybille de La Hamaide, Editing by Peter Blackburn))
