METALS-Copper eyes best quarter in 1-1/2 yrs as economy steadies
* China out on Golden Week holidays from Tuesday
* China official PMI for September due on Tuesday
* U.S. government aims to avert shutdown midnight on Monday
* Coming Up: Euro zone Flash inflation at 0900 GMT
(Adds detail, updates prices)
SINGAPORE, Sept 30 (Reuters) - London copper firmed on Monday and was on track to log the biggest quarterly advance since March 2012 on steadying global growth, although gains were capped as a U.S. government shutdown seemed increasingly likely.
U.S. Republicans and Democrats are locked in an impasse over funding and if a stop-gap spending bill is not passed before midnight on Monday, government agencies and programs deemed non-essential will begin closing their doors for the first time in 17 years.
"I'd say there is more of a case for buying negative news," said analyst Tim Radford at Sydney-based advisory Rivkin.
"There is obviously a negative economic impact of any shutdown which could weigh on copper. But if a shutdown does occur there is less chance that the Fed will reduce stimulus this year, so on that basis the downside will be muted."
The Federal Reserve must be patient in deciding when to scale back bond purchases, top officials said on Friday, with one arguing it could wait "years" to lift interest rates and another suggesting it could tolerate inflation rising to 3 percent.
Bond buying by the United States has been a key driver of investment in commodities.
Three-month copper on the London Metal Exchange edged up 0.3 percent to $7,322 a tonne by 0712 GMT, extending gains from the previous session. Prices were set to finish the quarter up more than 8 percent, but they are still down by around 8 percent so far this year.
The most-traded December copper contract on the Shanghai Futures Exchange climbed to 52,860 a tonne, which was its highest since Aug. 28, before closing at 52,800, up 0.9 percent on the day.
China's factory sector grew in September after rising foreign orders made up for a subdued home market, a private survey showed, suggesting Asia's economic powerhouse is starting to turn the corner although a firm rebound remains elusive.
China markets are closed for a week from Tuesday for Golden Week celebrations but the government will still release its September reading for the manufacturing sector on Tuesday. A string of reports from Europe and the United States this week could help set the tone for trade.
China has formally announced detailed plans for a new free-trade zone in Shanghai, touted as the country's biggest potential economic reform since Deng Xiaoping used a similar zone in Shenzhen to pry open a closed economy to trade in 1978.
Sentiment is ticking up for industrial metals - at least in the short term - but without stronger evidence of a rebound, strength could prove short lived, analysts said.
"Copper fundamentals are still sluggish and we favour selling rallies above $7,500 a tonne," Barclays said in a note. "Our economists believe that although the global manufacturing cycle appears to be turning up, this is likely to amount to just a temporary correction in a still weak underlying trend."
Comex copper speculators added 9,091 positions to return to net long in the week to Sept. 24, data showed.
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
(Editing by Richard Pullin and Himani Sarkar)