* Copper up 1.1 pct after hitting 14-month low last week
* Metals demand also supported by weaker dollar
* GRAPHIC-2018 asset returns: (Adds closing prices, weaker dollar)By Zandi ShabalalaLONDON, Aug 20 (Reuters) - Copper edged higher on Monday,bouncing back from its third straight week of losses in a signof market optimism over planned trade talks between China andthe United States and a view that the recent decline in metalswas overdone. Benchmark copper on the London Metal Exchange (LME)ended 1.1 percent up at $5,991.50 a tonne, having hit a 14-monthlow last week as investors were spooked by a crash in theTurkish lira and the potential impact on metals of a U.S.-Chinatrade war."The rise today could be investors positioning ahead of thetalks between China and the U.S. They (investors) could bethinking it's a good sign and the risk of a full-blown trade warwill be averted," said Capital Economics commodities economistSimona Gambarini, adding that last week's fall was overdone.
DOLLAR: A weaker dollar boosted demand for commodities. SUPPLY: The union representing workers of Chilean coppermine Escondida signed a new collective labour contract onFriday, ending the risk of a strike that could have paralysedthe world's biggest copper mine. COPPER STOCKS: Inventories of copper in China, at 155,076tonnes in warehouses monitored by the Shanghai Futures Exchange,have halved since a 2018 peak in March. In LME warehouses, on-warrant stocks available to the marketrose slightly to 223,200 tonnes. CHINA CREDIT: China's banking and insurance regulator hasasked financial institutions to give more support toinfrastructure investment, importers, exporters and creditworthycompanies experiencing temporary problems. INVESTORS: Hedge funds and money managers trimmed their netshort position in copper futures and options, data from the U.S.commodities regulator showed on Friday. ALUMINIUM: Global primary aluminium output rose to 5.472million tonnes in July from a revised 5.334 million tonnes inJune, data from the International Aluminium Institute showed onMonday. OTHER METALS: Aluminium rose 1.2 percent to 2,055 atonne, also helped by the prospect of trade talks. Zinc shed 0.5 percent to $2,377.50 while lead ended 0.8percent down at $1,972.50, tin added 0.5 percent to$18,800 and nickel advanced by 0.5 percent to $13,560.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Melanie BurtonEditing by Jane Merriman and David Goodman)
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