METALS-Copper slips on U.S. political uncertainty, China holiday
* U.S. government shutdown begins
* China out on Golden Week holidays
* Dollar index falls to near eight-week low
(Updates prices, adds comment, detail, previous SINGAPORE)
LONDON, Oct 1 (Reuters) - Copper slipped on Tuesday after the first U.S. government shutdown in 17 years, with trading activity thin as top consumer China was on a week-long holiday.
Three-month copper on the London Metal Exchange (LME) slipped to $7,271 a tonne at 0925 GMT, down from a close of $7,302 on Monday.
U.S. Federal government agencies have been directed to cut back services after lawmakers failed to pass a temporary spending bill before a midnight deadline, threatening the salaries of over a million workers.
Copper prices are tilting towards the higher end of their recent range, running on improving technical outlooks, traders said, but the absence of top consumer China suggested any advance was unlikely to find much traction in the short term.
Copper prices rose to their highest in 10 days on Monday at $7,330 a tonne, but have remained in a wider $7,000-$7,500 range since early August.
"Copper along with other commodity markets are stuck in a range due to a lack of a clear message on the Fed's tapering programme and now that we have a government shutdown," said Naeem Aslam, chief market analyst at AvaTrade.
"With the possibility of the nonfarm payrolls coming out on Friday, the rangebound trade could continue in the coming days."
The U.S. nonfarm payrolls are scheduled to be released on Friday but the U.S. could stop publishing its economic data in the wake of the government shutdown.
In China, manufacturing growth edged up only slightly in September, with its official Purchasing Managers' Index (PMI) below expectations and adding to worries that its economic recovery has foundered.
Still, some analysts said the outlook for Chinese copper demand was better. China is the world's top copper consumer, accounting for around 40 percent of refined demand this year.
"Chinese copper demand growth shrank in the first part of the year but now Chinese demand is stabilising ... statistics will look better in the second half of the year," said Matt Fusarelli, an analyst at consultancy AME Group in Sydney.
Keeping copper prices from falling further was a weak dollar, which dropped to a near eight-week low against a basket of currencies.
A weak dollar makes commodities priced in the U.S. unit cheaper for holders of other metals.
The Mongolian government is confident it can resolve disputes with Rio Tinto over a $5 billion expansion of the Oyu Tolgoi copper and gold mine by Dec. 31, the deadline for sealing financing for the project, an official said on Tuesday.
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
(Additional reporting by Melanie Burton in Singapore, editing by William Hardy)