METALS-Copper steady on growth prospects, U.S. political worries weigh
* 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
LONDON, Sept 30 (Reuters) - Copper was steady on Monday as a soft dollar and signs of steady global growth offset investors concerns about the prospect of an imminent U.S. government shutdown.
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 programmes deemed non-essential will begin closing for the first time in 17 years.
Concerns about the shutdown pushed world shares and the dollar lower.
Benchmark three-month copper on the London Metal Exchange was untraded in official rings, but was bid at $7,295 from $7,300 at the close on Friday.
Prices were set to finish the quarter up more than 8 percent, but they are still down by around 8 percent this year.
"Downside momentum is dominating the global equities market and usually commodities track the momentum in equities and currencies," Sucden senior research analyst Myrto Sokou said.
However, recent U.S. and China economic data was underpinning the price of copper, which is used in construction and power cable.
"Some of the data was in line with expectations, but it's still quite decent data," Sokou said. "And we have seen a slow but steady recovery in China. So I think the base metals market is slightly more optimistic than the rest of the financial markets."
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.
In the United States, weekly jobless claims data last week suggested an improving labour market.
But the U.S. government left its estimate for economic growth in the second quarter unchanged at 2.5 percent, while contracts to buy previously owned U.S. homes fell for a third straight month in August, a reminder for some of the economy's less-than-robust health.
A softer dollar also helped to underpin copper. A weak dollar makes commodities priced in it less expensive for holders of other currencies.
Top Federal Reserve officials said on Friday the U.S. central bank must be patient in deciding when to scale back bond purchases, with one arguing it could wait "years" to lift interest rates and another suggesting it could tolerate inflation rising to 3 percent.
"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," said analyst Tim Radford at Sydney-based advisory Rivkin.
Bond buying by the United States has been a key driver of investment in commodities.
While sentiment is improving for industrial metals, 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."
In other metals, zinc was $1,914 in rings from $1,907 at the close on Friday, lead was $2,103 from $2,100, nickel was $13,930 from $13,985.
Aluminium, untraded in rings, was bid at $1,849 from $1,839 and tin, also untraded, was bid at $23,395 from $23,350.
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