METALS-Copper above 5-week low as Syria worry eases, dollar falls
* Copper rises from Aug 8 lows hit on Friday
* Russia-U.S. deal on Syria lifts risk appetite
* Dollar falls after Summers withdraws from Fed chair race (Updates with official prices)
By Susan Thomas
LONDON, Sept 16 (Reuters) - Copper lifted on Monday from the five-week low it hit on Friday as investors' appetite for risk improved on expectations of a diplomatic solution to the Syria crisis and the dollar fell.
Signs of progress in Syria following a Russian-brokered deal aimed at averting U.S. military action helped lift the prices of assets like copper and equities perceived as risky investments.
The dollar fell to a four-week low against a basket of currencies after Lawrence Summers withdrew his candidacy for chairman of the U.S. Federal Reserve.
A weaker dollar supports copper as it typically helps boost demand for dollar-denominated assets by making them cheaper for holders of other currencies.
Summers is perceived by markets as hawkish, and his decision could leave Janet Yellen, a policy dove, as front runner for the job. Investors wagered that U.S. monetary policy would likely stay easier for longer under Yellen.
Three-month copper on the London Metal Exchange, untraded in official rings, was bid at $7,084.50 a tonne from $7,041 at the close on Friday. It dropped to a low of $7,024 a tonne on Friday, its weakest since Aug. 8.
"Firstly, the Syrian crisis has receded further into the background, so that worry has moved away and has helped support copper," BNP Paribas analyst Stephen Briggs said.
"Secondly, there is the perception that the other possible Fed candidates will be more likely to continue with quantitative easing, and through that the dollar has weakened which is also a factor in supporting the base metals prices."
Copper is up around 7 percent from three-year lows hit in late June, underpinned by improving sentiment on global growth. Recent data has boosted optimism about demand in China, which accounts for 40 percent of global copper consumption.
But copper has failed to make headway above $7,420 a tonne, the top-end of a recent band hit in mid-August.
A break out of this band is unlikely ahead of a Fed policy meeting on Tuesday and Wednesday after which it is expected to announce a trimming of its bond buying programme, analysts said.
"With (the) FOMC meeting the main focus of the wider global markets, the (base metals) complex is likely to continue drifting sideways until some clarity emerges of the timing and scale of any tapering," Standard Bank said in a research note.
Benchmark lead was $2,063 per tonne in rings, after falling 2.3 percent on Friday to a six-week low, weighed down by inventories of the metal rising by nearly 30 percent in one day. It closed at $2,070 on Friday.
Inventories <0#MPBSTX-LOC> of the metal shot up by 49,475 tonnes at LME-registered warehouses in the Dutch port of Vlissingen in one day last week. It was the biggest daily rise in lead stocks since 1970, according to LME data on Friday.
Benchmark tin was $22,895 in rings from $22,900 at the close on Friday, zinc was $1,885 from $1,869 and nickel was $13,900 from $13,875. Aluminium, untraded in rings, was bid at $1,785 from $1,790
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin (Additional reporting by Naveen Thukral in Singapore; editing by James Jukwey and Keiron Henderson)
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