MARKETS-METALS (UPDATE 4) * Markets look to Bernanke's speech at 1400 GMT * LME copper aluminium stocks fall * Coming up: U.S. Q2 GDP at 1230 GMT (Adds official prices) By Pratima Desai LONDON, Aug 27 (Reuters) - Copper hit a one-week high on Friday but was expected to come under pressure as nervous investors sell ahead of U.S. Federal Reserve Chairman Ben Bernanke's speech on the economic outlook. Benchmark copper on the London Metal Exchange hit $7,334.50 a tonne, its highest since Aug. 20. The metal used in power and construction was untraded in official rings, but bid at $7,300 a tonne from $7,304.50 a tonne on Thursday. Bernanke is due to speak at 1400 GMT. His comments will be closely scrutinised by markets, which are daily becoming more jittery about the health of the United States, the world's largest economy. "The most important thing today will be Ben Bernanke's speech, the market wants to know what he will do to counter the deflationary threats that are clearly increasing in the U.S.," said Dan Brebner, analyst at Deutsche Bank. "The overall tone will be modestly negative today, but we're not going to see large swathes of red on our screens." Brebner added that Bernanke would probably only make general comments, which may not satisfy investors. "Markets are looking for some kind of meaningful indication on quantitative easing." Before then the market sees the preliminary estimate of second-quarter gross domestic product growth in the United States at 1230 GMT. That is followed by the Thomson Reuters/University of Michigan consumer survey at 1355 GMT. "If we throw into the mixture the dollar, we could see some real fireworks this afternoon," a metal trader said. A lower U.S. currency makes dollar-denominated metals cheaper for holders of other currencies. COPPER DEFICIT Supporting copper were stocks in LME warehouses, which at 400,100 tonnes are down more than 25 percent since the middle of February and their lowest since last November. "LME copper stockpiles have virtually plunged non-stop since their 6.5-year high in mid February," Commerzbank said in a note. "The reduction of stocks is due to stronger demand, which could drive the global copper market into a deficit." Aluminium stocks in LME warehouses have also been falling. They now stand at above 4.44 million tonnes compared with a record above 4.64 million tonnes in January. However, about 70 percent of LME aluminium stocks are said to be tied up in financing deals, which earn banks higher returns than they would get in money markets and release cash for producers. That is said to be the reason for the large holdings of LME aluminium stock warrants and cash contracts by two entities. This combined with large short positions is why there is a backwardation or premium for nearby material. The premium for material to be delivered on Monday and bought back on Tuesday -- known as tom/next and often used to lend material to short positions -- is now around $1 a tonne. The range for tom/next aluminium trades on Thursday was $1 to $9 a tonne from a small discount prior to Aug. 16. Aluminium, used in transport and packaging, traded at $2,012 a tonne in official rings from $2,022 on Thursday. Also on the radar are large holdings of stock warrants and cash contracts for aluminium alloy, North American aluminium alloy, copper, nickel, lead and tin. Tin hit a two-year of $21,750 a tonne as the market fretted about supplies from top exporter Indonesia. It traded at $21,450 a tonne from $21,350 on Thursday. Stainless steel ingredient nickel was bid at $20,600 a tonne from $20,450, battery material lead at $2,033 a tonne from $2,025.5 and zinc at $2,040 from $2,050. Metal Prices at 1207 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Percent Move End 2009 Ytd Percent move COMEX Cu 329.60 -0.85 -0.26 334.65 -1.51 LME Alum 2007.00 4.00 +0.20 2230.00 -10.00 LME Cu 7283.00 -21.50 -0.29 7375.00 -1.25 LME Lead 2020.00 -5.50 -0.27 2432.00 -16.94 LME Nickel 20500.00 50.00 +0.24 18525.00 10.66 LME Tin 21275.00 925.00 +4.55 16950.00 25.52 LME Zinc 2040.00 -10.00 -0.49 2560.00 -20.31 SHFE Alu 15325.00 0.00 +0.00 17160.00 -10.69 SHFE Cu* 57850.00 500.00 +0.87 59900.00 -3.42 SHFE Zin 17055.00 140.00 +0.83 21195.00 -19.53 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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