* Lead hits $2,192/T, highest since Jan. 23
* Germany's Ifo business sentiment index falls in June
* Nickel supply tightness priced in on consensus view - Triland (Updates with closing prices)
By Susan Thomas and Eric Onstad
LONDON, June 24 (Reuters) - Lead prices hit a five-month high on Tuesday, benefiting from a rally in zinc as investors bet that shortages in the two metals would build up and deficits become deeper.
Three-month lead on the London Metal Exchange rose to a session high of $2,192 a tonne, the strongest since Jan. 23. It later pared gains to close up 0.3 percent at $2,183.50.
"Lead too, like its sister metal, zinc, is poised for better times ahead after being weighed down by oversupply in 2011-13," said analyst Andrew Shaw at Credit Suisse.
Zinc touched 16-month highs on Monday as investors priced in the impact of major zinc-lead mines closing, including Century in Australia. On Tuesday, zinc ended 0.4 percent weaker at $2,175 a tonne.
"Against a background of struggling supply, and the loss of Century next year, market deficits (in lead) should get deeper," Shaw said in a note.
Last week, data showed that lead had a market deficit of 12,000 tonnes in the first four months of the year.
In other metals, copper edged lower after three days of gains, coming under pressure from a firmer dollar and renewed signs of economic weakness in Europe. Declines were offset by encouraging global growth prospects elsewhere.
European stocks were also pressured by Germany's Ifo index of business sentiment, which fell more than expected in June.
The dollar gained after U.S. consumer confidence jumped to its highest level in nearly 6-1/2 years in June and sales of new homes surged in May.
A stronger dollar weighs on commodities priced in the U.S. currency, making them more expensive for buyers outside the United States.
Three-month copper, which failed to trade in closing rings, was last bid at $6,880 a tonne, down 0.1 percent. Copper touched its highest close in three weeks on Monday.
"After a rally during the past few days, we are seeing some traders taking profit off the table...," Avatrade chief market analyst Naeem Aslam said.
"The German Ifo Business climate sentiment data released this morning was also disappointing and this is very much weighing on sentiment," he added.
Still, tight supply and solid consumption from top user China were helping to underpin copper prices, despite a metals financing scandal at a Chinese port that has curbed deals backed by metal as collateral. The scandal is expected to erode imports, analysts said.
"We would have expected prices to come off more substantially as these financing deals unravel," analyst Matt Fusarelli of AME Group in Sydney said. "It's showing that demand is not that bad."
China accounts for some 40 percent of global refined copper demand.
LME nickel closed 1.6 percent weaker at $18,130 a tonne, but is still up around 30 percent so far this year on the back of an export ban in top producer Indonesia.
Broker Triland said "a growing proportion of participants seem to feel that the major moves (in nickel) are now fully factored in the price".
LME aluminium closed up 0.3 percent at $1,896 per tonne and tin ended 0.2 percent higher at $22,575.
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 Melanie Burton, editing by Keiron Henderson and Erica Billingham)