METALS-Copper rebounds from 5-week low, limited by dollar strength

(Updates prices and adds trader's quote)

By Violet Li and Mei Mei Chu

SHANGHAI, Dec 20 (Reuters) - Copper prices rebounded on Friday from a five-week low hit in the previous session, as most base metals gained on positive economic indicators from the United States.

Gains were however limited by a stronger U.S. dollar and a hawkish Federal Reserve rate outlook.

"The dollar remains strong. Even with today's rebound in metals prices, there's still a risk of decline," a trader said.

Three-month copper on the London Metal Exchange (LME) rose 0.6% to $8,934 per metric ton by 0712 GMT. On Thursday, copper fell to $8,869, its lowest level since Nov. 14, pressured by a firmer dollar.

Data released on Thursday showed that fewer-than-expected Americans filed new applications last week for jobless benefits.

Meanwhile, the U.S. economy grew at a 3.1% annualised pace in the third quarter ended Sept. 30, driven by robust consumer spending. The economy was previously reported to have expanded at a 2.8% pace.

The dollar was poised to end the week on a firm note. It was hovering near a two-year high, supported by a hawkish U.S. rate outlook.

A stronger dollar makes it more expensive for other currency holders to buy greenback-priced commodities.

On Wednesday, the Fed cut interest rates by 25 basis points and Chair Jerome Powell said future reductions hinge on further progress in lowering stubbornly high inflation, hinting at economic changes under the incoming Donald Trump administration.

LME aluminium gained 0.8% to $2,528 a ton, zinc rose 0.7% to $2,987, tin advanced 1.0% to $28,690, nickel added 0.6% to $15,195, and lead slid 0.1% to $1,970.5.

The most-traded January copper contract on the Shanghai Futures Exchange had shed 0.2% to 73,820 yuan ($10,116.21)a ton by the close of Asia afternoon trade session.

SHFE aluminium added 0.6% to 19,975 yuan a ton, tin declined 0.3% to 242,620 yuan, nickel dropped 1% to 122,410 yuan, zinc slid 0.1% to 25,155 yuan and lead shed 0.4% to 17,360 yuan.

For the top stories in metals and other news, click or ($1 = 7.2972 Chinese yuan) (Reporting by Violet Li and Mei Mei Chu; Editing by Sumana Nandy and Subhranshu Sahu)