RTRS: METALS-Copper hits 1-month high on weak dollar, demand prospects
* Euro at six-week high against dollar
* China bonded copper premiums up $5 at $195/$210 from prior month
By Harpreet Bhal
LONDON, Dec 10 (Reuters) - Copper touched its highest level in a month on Tuesday, aided by a weaker dollar, with steady buying from top consumer China also helping to underpin prices.
Three-month copper on the London Metal Exchange traded at $7,170 a tonne in official rings, up from a last bid of $7,130 a tonne.
The metal used in power and construction is down about 10 percent for the year to date. It broke below $7,000 a tonne in mid-November after holding in a $7,000-$7,400 range since August.
"I think this (gain) is mainly due to short-covering. We have quite high net short positions in copper (and) ... the somewhat weaker dollar is playing its role," said Daniel Briesemann, analyst at Commerzbank.
The euro to a six-week high against the dollar. A weak dollar makes commodities priced in the U.S. unit cheaper for holders of other currencies.
The U.S. Federal Reserve is expected to begin trimming its monthly asset purchases in March, a Reuters poll showed, but some economists were warming to the idea it could do so as early as this month or at the January policy meeting.
Growth in China's factory output and investment eased slightly in November, while retail sales grew at their strongest rate this year, data showed on Tuesday, suggesting the economy was on track to achieve the government growth target this year.
"We are expecting demand conditions in the first quarter next year to be much more positive, not just in China ... but in the rest of the world as well," said analyst Matt Fusarelli of Sydney-based AME Group.
Physical demand for copper remained strong, with bonded copper premiums up $5 at $195/$210 a tonne from month-ago levels, according to price provider Shmet. ()
"We might see some correction in the short term as the market has rallied $200, and Chinese banks are tightening on copper financing," a broker in Hong Kong said.
In other metals, nickel appears set to trend higher in 2014 due to tighter supplies, while unfavourable economics should keep pressure on gold and oil and prompt investors to avoid much of the commodity complex, Barclays said.
Nickel prices have outperformed for the past two weeks, gaining around 3 percent, but the metal is by far the worst performer this year with losses of more than 18 percent.
Nickel traded at 14,070 from a close of $13,995, having hit its highest level in a month earlier in the session at $14,120.
Aluminium was at $1,808 from $1,793, lead was at $2,130 from $2,110, and zinc was at $1,940 from a last bid of $1,918.
Tin, untraded in official rings, was bid at $23,250, flat from Monday's close.
