METALS-Copper heads for weekly gain on improved risk sentiment, stable dollar

(Updates prices, adds quotes)

July 23 (Reuters) – Copper advanced on Friday as improved risk sentiment and a stable dollar lifted prices of metals, while an extended policy easing in the European Union lent support.

Three-month copper on the London Metal Exchange rose 0.8% to $9,516 a tonne by 0512 GMT while the most-traded August copper contract on the Shanghai Futures Exchange advanced 1.7% to 69,810 yuan a tonne.

Both the contracts for copper, which is often used as a gauge of global economic health, are set to gain this week.

โ€œWe saw a slight bounce in equity markets yesterday as upbeat earnings help overcome worries about growth and together with a stable dollar it means metals can trade a bit more on their own fundamentals,โ€ said commodities broker Anna Stablum of Marex Spectron.

โ€œIt is macroeconomic headwinds that are giving them a tough time to rally. Microeconomic for most of these metals look solid… thus lead, nickel and tin are performing well,โ€ she added.

The European Central Bankโ€™s pledge to keep interest rates at record lows for longer to boost recovery and a sluggish inflation also lent support.

โ€œ(This) might add to bullish sentiment. Loose monetary policy is a big reason why we are up here in the first place,โ€ Stablum said.

FUNDAMENTALS

* The premium of LME cash lead over the three-month contract CMPB0-3 hit $21 a tonne, its biggest since June 29, indicating tightening nearby supply as LME inventories stayed at a one-year low MPBSTX-TOTAL and floods in Germany hit European production.

* ShFE nickel hit its highest since Feb. 26 at 143,940 yuan a tonne, tin climbed 3.9% to 234,580 yuan a tonne, hovering near a record high hit in the previous session, while lead touched an 11-month high at 16,315 yuan a tonne.

* LME nickel rose to a near five-month high at $19,305 a tonne and tin hit a record $34,500 a tonne.

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