LONDON: Copper edged higher on Monday on the back of a weaker dollar but gains were kept in check after lacklustre rises in Chinese home prices fuelled worries about demand in the world's top metals consumer.
Data on Monday showed home price rises in China slowed in June for a second straight month, adding to concern over the sustainability of a construction-led economic rebound.
"This slowing increase in Chinese house prices we've seen over the weekend puts the focus back on the medium-to-longer-term issue, which is oversupply in the real estate market," Julius Baer analyst Carsten Menke said.
"This euphoria that we've seen in the steel and iron ore markets is clearly fading again based on the (home price) data and you have some spill over in copper and aluminium."
Chinese steel-related commodities futures dived on Monday, erasing last week's rally as investors felt the previous gains outpaced physical demand for steel in China.
Both copper and aluminium were weaker for much of the session but clawed into positive territory before the close as the dollar index slipped, making commodities priced in the U.S. currency cheaper for buyers using other currencies.
Benchmark copper, mainly used in the construction and power sectors, closed 0.4 percent up at $4,939 a tonne on the London Metal Exchange (LME).
Copper had rallied 12 percent from mid-June to mid-July, topping out at $5,032 last week, partly on hopes for more stimulus from Chinese authorities.
Three-month LME aluminium rose 0.1 percent to end at $1,660 a tonne.
Zinc and nickel also remained in positive territory, as speculators continued their buying spree, fuelled by concern about possible shortages in the two metals.
LME zinc finished with a 0.6 percent gain at $2,218 a tonne while nickel shot up by 2.7 percent to $10,545.
Broker Marex Spectron said in a note that its speculative positioning estimates showed the long in nickel on the LME had climbed to heights not seen since July 2014.
Nickel, however, was still the second-largest speculative long of the LME complex after zinc, Marex added in a note.
Tin closed 1.2 percent weaker at $17,925 a tonne, while lead slipped 1 percent to $1,854.
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