* Copper hovers near eight-month high * Nickel touches lowest in nearly four weeks (Updates with closing prices) By Zandi Shabalala LONDON, Jan 6 (Reuters) - Copper edged higher on Monday as arise in oil prices offset softer Chinese economic data and anescalation in tension between the United States and Iran,analysts said. Commerzbank analyst Daniel Briesemann said the jump in oilprices since the United States killed Iranian general QassemSoleimani would push up miners' costs and this was leaving basemetals relatively resilient to increased geopolitical tension. "Base metals have held up well but they will come under somepressure because of risk aversion," said Briesemann said.
Benchmark copper on the London Metal Exchange(LME)ended 0.1% higher at $6,138 a tonne, climbing towards aneight-month high. Iran said it would retaliate against the United States afterthe killing of Soleimani last week, prompting some investors toshed riskier stocks and move into safe-haven assets such asgold, government bonds and the yen. A weaker dollar on Monday also helped commodities prices tofirm. The downbeat reading of China's services sector, whichaccounts for more than half of the top metal consumer's economy,highlighted corporate concerns over subdued economic conditionsThe services report came on top of data last week that showedactivity in the construction sector had pulled back. POSITIONING: The net speculative long in copper was 11% ofopen interest as at Thursday's close, estimates by MarexSpectron showed.
TRADE DEAL: A Chinese delegation plans to visit Washingtonon Jan. 13 for the signing of a U.S.-China Phase 1 trade deal,the South China Morning Post reported on Sunday. A thawing in trade relations between the two economic giantshelped copper to climb more than 5% in December, thoughCommerzbank analysts said subsequent negotiations on furtherpartial agreements will prove "far more difficult because theywill address sensitive issues". COPPER: First Quantum Minerals Ltd fell as much asnearly 4% on Monday after the copper miner said it had adopted apoison pill takeover defense, nearly a month after China'sJiangxi Copper Co Ltd , agreed to pay $1.1billion to become its largest shareholder. MIDDLE EAST: Copper prices have been hit by the U.S.-Iransituation and flight from market risk, Goldman Sachs said. "Further escalation of geopolitical tensions has thepotential to dampen economic activity and weaken base metalsdemand," the bank's analysts said, though they remain bullish oncopper owing to depressed margins at smelters. ALUMINIUM SPREADS: Cash aluminium deepened its discount tothe three-month contract, pointing to plentiful supply. It stoodat $33 a tonne, the deepest discount since mid-September. On-warrant inventories of aluminium in LME-approvedwarehouses rose to 938,650 tonnes. Aluminium rose 0.5% to $1,833 a tonne, aftertouching its highest since July 22. OTHER METALS: Zinc climbed 0.8% to $2,324.50 atonne, its highest in two weeks, lead ended at a steady$1,920, tin rose 0.3% to $16,850 and nickel edged up by 0.5% to $13,820 after touching its lowest in nearlyfour weeks. (Additional reporting by Naveen Thukral in Singapore and TomDaly in Beijing; Editing by David Goodman and David Clarke)
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