METALS-Copper hits one-week high after Powell points to possible rate cut

By Eric Onstad

LONDON, Aug 22 (Reuters) - Copper prices rose for a third session on Friday after the U.S. central bank chief opened the door to interest rate cuts and as demand in top metals consumer China remained healthy.

Benchmark three-month copper on the London Metal Exchange CMCU3 was up 0.5% at $9,777 a metric ton by 1620 GMT, after touching its highest since August 14 at $9,813.50.

Friday's gains are still below a peak of $10,020.50 touched on July 2, its strongest in more than three months.

Prices extended gains after U.S. Federal Reserve Chair Jerome Powell pointed to a possible rate cut at the central bank's September meeting but stopped short of committing to cutting interest rates.

"A dovish bent... could be very supportive for copper prices as that would maintain demand," said Nitesh Shah, commodity strategist at WisdomTree.

Powell's remarks spurred a drop in the dollar index .DXY, making commodities priced in the U.S. currency less expensive for buyers using other currencies. FRX/

Copper was also supported by indications of firm demand, Shah said.

"Refined copper for now is exempt from tariffs, so I don't think there's going to be much of a dent in demand for copper in general, and Chinese demand for copper remains fairly healthy," he said.

Last month, U.S. President Donald Trump imposed a 50% tariff on copper products, but left out ores, concentrates and cathodes.

In China, the Yangshan copper premium SMM-CUYP-CN, which reflects demand for copper imported into China, has gained 13% to $51 a ton since August 11.

LME aluminium CMAL3 also rose, adding 1.3% to $2,618 a ton. The anticipation for demand seasonally picking up next month was helping to support aluminium prices, analysts at broker Guosen Futures said on Friday.

Among other metals, LME zinc CMZN3 advanced 1.5% to $2,807.50 a ton, lead CMPB3 gained 1.2% to $1,993, nickel CMNI3 climbed 0.7% to $15,040 and tin CMSN3 added 1.1% to $33,800.