METALS-Copper hits fresh highs as speculators make more tariff bets

(Updates prices at 1700 GMT, adds Nvidia) By Eric Onstad LONDON, March 19 (Reuters) - U.S. and London copper prices hit fresh multi-month highs on Wednesday as speculators extended buying on expectations that U.S. tariffs will be slapped on the metal. Copper also got a boost after Nvidia said on Tuesday that it would stick with copper cables for connections between its flagship chips because optical technology was not as reliable. Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) rose 0.8% to $9,981 a metric ton by 1700 GMT, its highest since October 8. Most active May copper futures on the U.S. Comex exchange HGc3 climbed 1.6% to a 10-month high of $5.10 a pound. U.S. President Donald Trump's 25% tariffs on steel and aluminium products took effect last week and he has also ordered an investigation into potential new tariffs on copper. Systematic funds that use computer analysis were leading the buying on the market largely based on surging momentum as technical levels are broken, a trader said. Some investors were buying base metals and selling ferrous metals or oil in relative value trades, Alastair Munro at Marex said in a note. Some analysts warned, however, that the high copper prices were not supported by supply/demand fundamentals. "We've still got this pressure to get as much stuff as possible across to America. The copper arb (arbitrage), which we quote, that's continuing to blow out," said Dan Smith, head of research at Amalgamated Metal Trading. The premium on Comex copper over the LME price widened to a record $1,259 a ton, surpassing a record peak hit on Tuesday. "I'm actually quite nervous about what's going to happen in three to six months' time because I think a lot of this is rather artificial," Smith said. Curbing gains was a stronger dollar index .DXY , which makes commodities priced in the U.S. currency more expensive for buyers using other currencies. Zinc CMZN3 was the worst LME performer, slipping 1.3% to $2,924 a ton after Boliden BOL.ST said on Tuesday it was commissioning an upgrade of its Odda zinc smelter to boost capacity to 350,000 tons a year from 200,000. Among other metals, LME aluminium CMAL3 rose 0.5% to $2,668 a ton and nickel CMNI3 climbed 1% to $16,405 while lead CMPB3 dipped 0.4% to $2,085.50 and tin CMSN3 fell 0.6% to $35,035. (Reporting by Eric Onstad; Editing by Shreya Biswas and Shailesh Kuber, Kirsten Donovan For related news and prices, click on the codes in brackets: LME price overview RING= COMEX copper futures 0#HG: All metals news MTL All commodities news C Foreign exchange rates FX= SPEED GUIDES LME/INDEX ) ((mailto:eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: rm://eric.onstad.thomsonreuters.com@reuters.net/))