LONDON, Oct 9 (Reuters) - Copper prices rose to a one-week peak on Monday as Chinese buyers returned after a week-long holiday, but further gains are unlikely due to generally weak demand in top consumer China, a strong dollar and rising inventories.
Benchmark copper on the London Metal Exchange (LME) was up 0.9% at $8,118 a metric ton at 0924 GMT from an earlier at $8,142, the highest since Oct. 2.
Prices of the metal used in the power and construction industries last week touched $7,870, the lowest in more than four months.
"Things don't seem to be improving in China. The property market is still in trouble," a copper trader said.
The military clashes between Israel and Palestinian Islamist group Hamas were also a source of uncertainty for markets, traders said.
A higher U.S. currency makes dollar-priced metals more expensive for holders of other currencies, which would eventually subdue demand and prices.
Stocks of copper
This rise combined with poor demand prospects have
created a large discount for the LME's cash over the three-month
copper contract
Latest data from China showed average daily home sales during the holiday were down 17%, based on floor area, compared with last year, despite a series of piecemeal support measures to restore confidence in an ailing property market.
"For the first time in over two decades, China’s materials-intensive growth cycle is unresponsive to government led macro-support," said Liberum analyst Tom Price.
"Its key commodity-consuming sectors of property and infrastructure are thoroughly built out...while economic activity there is stabilising somewhat, it remains weak and vulnerable."
In other metals, aluminium was up 0.3% at $2,246, zinc added 0.7% to $2,527, lead rose 0.2% to $2,148, tin advanced 1.7% to $25,075 and nickel climbed 1.8% to $18,915.
(Reporting by Pratima Desai; editing by Simon Cameron-Moore)