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METALS-Copper firm ahead of trade talks, still heading for weekly fall

Zandi Shabalala

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

* LME copper stocks have surged since Feb. (Updates throughout, changes dateline to LONDON)

LONDON, May 3 (Reuters) - Copper prices inched higher on Friday as investors remained optimistic ahead of U.S.-China trade talks next week that are widely expected to progress well.

Talks to end a long-standing trade dispute between the United States and top metals consumer China will resume in Washington after meetings in Beijing this week sparked hopes for an end to the tit-for-tat conflict soon.

"The mood over trade talks seems cautiously optimistic," said BMO Capital Markets analyst Kash Kamal.

"The economic data points we are tracking suggest the current impasse is negatively impacting other trading partners, not just China and the U.S., suggesting calls for a quick resolution."

Benchmark copper on the London Metal Exchange inched up 0.3 percent to $6,183 per tonne by 1110 GMT, rebounding from a two-and-a-half-month low touched in the previous session.

The metal used in power and construction is still on track for its biggest weekly loss since November after computer-driven funds sold following an options expiry.

DOLLAR: The dollar has edged higher since Federal Reserve Chairman Jerome Powell played down a recent slowing in inflation and said he saw no reason to cut interest rates, putting pressure on commodities.

INVENTORIES: Copper stocks available to the market in LME-approved warehouses -- on warrant stocks -- dropped 5,750 tonnes to 164,375 tonnes <MCUSTX-TOTAL>. This is up from 21,600 tonnes at the end of February.

POLL: Copper prices are expected to extend their rebound in coming months as recovering demand in top metals consumer China and mine disruptions create a larger than expected deficit, a Reuters poll showed.

TRADE TALKS: American negotiators locked in trade talks with China are expected to win more access to the Chinese cloud computing market than expected under an initial proposal, a U.S. Chamber of Commerce official said on Thursday.

ALUMINIUM: On warrant stocks of LME aluminium have jumped 36 percent over the last week and inched up a further 1,050 tonnes to 874,050 tonnes, LME data showed on Friday. <MALSTX-TOTAL>

NICKEL INVENTORY: Nickel stocks in LME-approved warehouses <MNISTX-TOTAL> were at the lowest level since April 2013, latest data showed.

PRICES: Aluminium added 0.2 percent to $1,189 per tonne, zinc gained 1 percent to $2,759 after falling to a seven-week low in the previous session, lead gained 1.2 percent to $1,897 per tonne, tin eased 0.3 percent to $19,220 while nickel rose 0.6 percent to $12,200.

(Additional reporting by Mai Nguyen; Editing by Elaine Hardcastle)