* Zinc stocks at lowest since Feb 2008
* Premium for cash zinc over 3-month still elevated (Updates with closing prices)By Pratima DesaiLONDON, Dec 3 (Reuters) - Prices of industrial metals roseon Monday, with copper hitting a two-month high, after theUnited States and China agreed to a truce in a trade disputethat has undermined confidence in economic growth prospects.Benchmark copper on the London Metal Exchange endedup 1.6 percent at $6,295 a tonne. Prices of the metal used as agauge of global economic health hit $6,352 in early trading, itshighest since Oct. 4."The mood turned positive after China and the United Statesannounced their truce, but I'm not sure it will last; there aretoo many differences to overcome," said Commerzbank analystEugen Weinberg. A weaker dollar was another positive influence,he added.
TARIFFS: Washington and Beijing agreed in Argentina to haltadditional tariffs in a deal that keeps their trade war fromescalating as the two sides try again to bridge theirdifferences within 90 days. "We cannot get too excited about prospects for metals. Tradeissues will continue to dog the global economy for much of theyear," said INTL FCStone analyst Edward Meir. "The Argentinaagreement is not going to be a significant game-changer."Meir said low inventories across most metals could be a"bullish catalyst", but the inventory argument would becomedifficult to sustain with the prospect of a deterioratingmacroeconomic outlook next year.DOLLAR: A lower U.S. currency makes dollar-denominatedcommodities cheaper for holders of other currencies - arelationship used by funds to generate buy and sell signals frommathematical models. []FRX/INTEREST RATES: U.S. Federal Reserve Chair Jerome Powelllast week said interest rates were now "just below" estimates ofa level that neither brakes nor boosts a healthy U.S. economy,comments that many investors read as signalling the tighteningcycle is drawing to a close. CHINA: Industrial metal price gains were capped to an extentby a survey showing China's factory activity grew slightly inNovember, while new export orders extended their decline. China accounts for about half of global demand for basemetals.ZINC: Worries about zinc supplies on the LME market havebeen fuelled by inventories in LME-approved warehouses.Inventories have more than halved since August to 112,575tonnes, their lowest since 2008. This nervousness is why the premium for cash LME zinc overthe three-month price soared to $113 a tonne onFriday, its highest since 1997. It was last around $87 a tonne.Three-month zinc was up 1.6 percent at $2,583.PRICES: Aluminium closed 1.1 percent higher at$1,974 a tonne, lead slipped 0.3 percent to $1,964.5,tin rose 2.5 percent to $18,865 and nickel wasup 0.5 percent at $11,250.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Pratima Desai; Additional reporting by MaiNguyen; Editing by Mark Potter and Andrew Heavens)