METALS-Copper recovers after upbeat U.S., Chinese comments on deal

* GRAPHIC-2019 asset returns: (Updates with closing prices)

LONDON, Nov 22 (Reuters) - Copper rebounded on Friday after comments by the U.S. and Chinese presidents raised hopes that the two countries will forge a trade deal.

Donald Trump said on Friday that a trade deal with China is “potentially very close” while Xi Jinping said that China wants to work out an initial trade pact with the United States and has been trying to avoid a trade war.

“With the latest soothing comments and invitation for further talks, the market is once again erring on the side of believing that a trade deal can still be struck,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“We remain pretty sceptical about the potential impact of a deal. If it doesn’t really deliver on all counts, then we could see some more weakness.”

Three-month copper on the London Metal Exchange rose 0.5% to $5,855 a tonne in final open-outcry trading after closing 0.8% down in the previous session.

A key level to watch was $5,800, which if broken would open the way for losses to $5,600, the bottom of the recent range, Hansen added.

Market sentiment had soured this week on fears of a further delay in the signing of a “phase one” deal after two U.S. bills backing protesters in Chinese-ruled Hong Kong added to concerns that Sino-U.S. talks could flounder.

* LME COPPER STOCKS: LME copper inventories MCUSTX-TOTAL fell to 218,925 tonnes, the lowest since June 10, data showed on Friday.

* ALUMINIUM SPREAD: The premium of LME cash aluminium over the three-month contract CMAL0-3 rose to $13.50 a tonne, its highest since Dec. 31 last year. That compares with a discount of $33.25 in mid-September. The rising premium indicates tightness in near-term supplies in the LME system.

NICKEL DEFICIT: The global nickel market deficit widened to 3,200 tonnes in September from a revised shortfall of 300 tonnes the previous month, the International Nickel Study Group said.

NICKEL POSITION: The net speculative long position of LME nickel has declined to 2.9% of open interest, the lowest since July, according to estimates by broker Marex Spectron.

LME nickel, untraded in closing rings, was bid up 0.7% to $14,580 after earlier probing below the 200-day moving average at $14,265. “That is the potential line in the sand that some traders are looking for after the near 25% drop since September,” Hansen said.

PRICES: Aluminium rose 0.3% to close at $1,739 a tonne while zinc added 0.5% to $2,305 after touching a one-month low of $2,283.

Lead gained 0.4% to finish at $1,966 and tin shed 0.5% at $16,350. (Additional reporting by Enrico dela Cruz in Manila Editing by David Goodman and Louise Heavens)