* GRAPHIC-2019 asset returns: (Updates with closing prices)By Eric OnstadLONDON, May 24 (Reuters) - Nickel spiked to its highestlevel in over two weeks on Friday as bearish investors coveredpositions, while other industrial metals gained on a weakerdollar and hopes for a U.S.-China trade deal.World stocks edged higher and oil prices also recovered frombruising falls this week after U.S. President Donald Trumpnurtured hopes of progress in U.S.-China talks. "With the stock markets popping up a tad this morning andalso the dollar strength pausing, that's giving the market anexcuse to cover some shorts ahead of the weekend, which is along weekend in the UK and US," said Ole Hansen, head ofcommodity strategy at Saxo Bank in Copenhagen."But we are by no means out of the woods yet, if anything,it may just be the market pausing before we hit the nextheadline."Benchmark nickel on the London Metal Exchange surgednearly $500 in about 10 minutes in the morning, spurred byChinese investors covering short positions, traders said,continuing the rally in the afternoon.That sent nickel surging 5% to a peak of $12,495 a tonne,the highest since April 30, before paring gains in closing openoutcry activity to a bid of $12,370, a rise of 4%.
The move higher in nickel gained steam as it broke throughits 200-day moving average, a key technical level, traders said.
* COPPER: Three-month LME copper climbed 0.5% tofinish at $5,955 a tonne in closing rings, but on a weekly basisit marked a sixth consecutive decline.
* DOLLAR: The dollar index edged away from two-yearhighs on Friday after weak U.S. manufacturing activity data. Aweaker dollar makes dollar-denominated metals cheaper toimporters using other currencies.
* NICKEL FORECAST: Fitch on Friday revised down its Londonthree-month nickel average price forecast for 2019 to $13,250 atonne, from $14,500 estimated earlier, on rising global economicrisks, an escalating trade dispute and disappointing refinednickel demand from China so far this year.
* TIN SPREAD: The premium of cash LME tin over thethree-month contract jumped to $320 a tonne, thehighest since April last year, indicating tight availability ofimmediate supplies.
* ZINC: LME zinc climbed 1.6% to end at $2,560 atonne. The net speculative short position on the LME hadexpanded to 7.2% of open interest by the close on Wednesday,back to levels not seen since October 2018, according toAlastair Munro at broker Marex Spectron.
* ALUMINIUM: Strong aluminium output is expected for therest of the year due to falling costs, Commerzbank said in anote. "We believe that the continuing high supply, coupled with
the decline in demand dynamism, argues against any sustained andsignificant recovery of the aluminium price."
* PRICES: LME aluminium added 0.1% to close at$1,800 a tonne, lead gained 0.9% to $1,825 and tin , untraded in closing rings, was bid down 0.1 percent at$19,300 a tonne.
* For the top stories in metals and other news, click or <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Mai Nguyen in Singapore, editing byLouise Heavens and Susan Fenton)