METALS-Copper gains defy gloomy outlook

By Pratima Desai

LONDON, April 22 (Reuters) - Copper prices hit their highest in more than two weeks on Tuesday as a weaker dollar triggered fund buying, but traders doubted upward momentum would be maintained given that U.S. import tariffs dominate sentiment.

Levies imposed by President Donald Trump have dented the outlook for global economic growth and demand for industrial metals.

Benchmark copper CMCU3 on the London Metal Exchange (LME) climbed 2.1% to $9,379 a metric ton by 1600 GMT, after touching its highest since April 3 at $9,388.

One copper trader said the gains reflected fund buying in reaction to the U.S. dollar and some people cutting short positions rather than a reflection of market fundamentals.

The dollar has been hit by concern over the independence of the Federal Reserve after Trump's attack on Fed chief Jerome Powell.

A weaker U.S. currency makes dollar-priced metals cheaper for buyers with other currencies, potentially boosting demand.

That relationship is used by funds known as commodity trading advisers, which trade on buy and sell signals generated from numerical models.

On the technical front, copper has breached resistance at the 100-day and 200-day moving averages at around $9,290 and $9,330 respectively. The next upside barrier is around $9,380, the 21-day moving average.

Support for copper comes from stocks in warehouses monitored by the Shanghai Futures Exchange, which have dropped 36% to 171,611 tons since the end of February, along with lower inventories in Shanghai's bonded warehouses SMM-CUR-BON.

"Industrial metals seem to be focusing more on a weaker dollar as a bullish catalyst ... Ironically, tariffs might also be having a short-term bullish impact in that trade uncertainty could be stranding some production and tightening the supply picture, said Marex consultant Edward Meir.

"In addition, metals demand has yet to meaningfully decline as the impact of the tariffs on final consumption will take several more months to play out."

In other metals, aluminium CMAL3 rose 1.1% to $2,391 a ton, zinc MZN3 gained 1.1% to $2,605, tin CMSN3 climbed 1.8% to $31,190, nickel CMNI3 firmed 0.3% to $15,670 and lead CMPB3 added 0.1% to $1,924 after hitting its highest since April 4.

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