Key industrial metals closed with modest gains on Friday, supported by short covering ahead of the three-day US weekend, but traders said a firmer dollar was seen limiting further gains. Three months copper on the London Metal Exchange (LME) rose to $3,010 a tonne from Thursday's close of $3,000 after trading between $2,970 and $3,019.
"The market was quiet, ranging but steady," Standard Bank London analyst Robin Bhar said.
There was short covering in the afternoon as the US market is to close on Monday for Martin Luther King Jr. Day, but a rally in the dollar capped the upside, he said.
Trilan Metals analyst Roy Carson put support for copper at $2,970, with resistance at $3,030 and then $3,050.
By 1700 GMT, the euro was trading around $1.3100, down from $1.3217 late Thursday in New York.
The dollar modestly extended its gains against the euro after US headline producer prices fell more steeply than expected and industrial output rose more sharply than forecast.
The dollar surged in early trade after a senior Federal Reserve official hinted the United States might accelerate the pace of raising interest rates and Washington pledged a tighter budget and strong dollar policy.
Copper had now fallen by 4.4 percent from $3,150 at the end of last year. That compared with the peak on January 4 of $3,170, just below a near-16-year high of $3,175 on October 11.
But the copper market looked positive as stocks were trending lower, analysts said.
"On an aggregate weighted basis, we estimate total reported base metal stocks, measured as weeks of consumption, have now fallen to their lowest levels since the late 1980s," Barclays Capital said in a daily report.
"We expect further inventory falls and higher prices through the first half of this year, as the supply response is still insufficient to meet current consumer needs, keeping the base metal markets in deficit."
Mining shares in London rose on Friday, helped by Deutsche Bank, which raised its price targets on several stocks in the sector, including BHP Billiton and Xstrata, whose shares added 3.7 percent and 1.8 percent, respectively.
Rio Tinto shares added 2.3 percent after a report said it had asked Nippon Steel to pay 50 percent more for iron ore from April, reinforcing confidence that prices will rise even further this year as supplies are tight and Chinese demand remains robust.
Aluminium edged up by $0.5 to $1,830.5 and zinc gained $2 to $1,238.
Lead was up $1 at $897, while nickel ticked down to $14,655 against $14,745. Tin was untraded and was indicated at $7,500/7,525 versus $7,450.